Household projections play an important role in identifying the total amount of new housing supply that should be delivered. They are identified by Planning Practice Guidance as the starting point for objectively assessing housing need at a local level. However, they do not tell the whole story and can be misleading.

For a start, they are projections of recent trends, not forecasts. Hence, since the economic downturn, the forecasts indicate a reduced level of household formation, which is a reflection of affordability pressures restricting access to the housing market and lower levels of housebuilding.

Issues at a national level are magnified at a local level. Households can only form if there is a home for them to move into. If not enough homes are built, the household projection will be correspondingly lower. Forecasts in areas with historically low levels of housebuilding may therefore mask high levels of concealed housing need.

Household projections are heavily based on population projections and as such are dependent on assumptions of certain unknowns such as future trends in migration. Any change in the attractiveness of an area as a place to live, work or study could have a significant impact on the population projections, which feeds through into the household projections.

Analysis by the TCPA in 2013 (undertaken by the late Alan Holmans) takes into account economic factors such as the 2008/09 downturn and indicates that the true need for housing in England is 240-245,000 homes per year, far in excess of the 210,000 stated in the latest official household projections issued in 2012.

It is therefore essential to investigate the full range of evidence available, including market signals, to understand all the interlocking factors that contribute to our need for housing now and in the future. For the reasons given above we have used Holmans’ figures in our analysis opposite, referencing the former government regions that were used in that study.