Has Household Size Stopped Falling? Does it Mean we Need Less Housing?
One of the most contentious questions in ‘objectively’ calculating housing need is whether household size has stopped falling.
One of the most striking demographic features of the last 50 years has been the striking fall in average household size, dramatically outstripping natural population increases as the main component of household formation and therefore housing targets. Young people have through most of the post war years been leaving home sooner, divorce rates have increased and people have been living longer (which because women live longer than men results in more single person households).
In recent months some have questioned whether household size will continue to fall. Indeed this issue nearly derailed the Cheltenham-Gloucester-Tewksbury Local plan recently. The reason
Neil Hudson of Savills
During the ten years period from 1991 to 2001, the average size of the UK household fell from 2.50 people per household to 2.41. Since then, household projections have assumed that this scenario would continue and projected the ratio to fall to 2.35 in 2011 and 2.27 in 2021. However the 2011 census has showed that this ratio has remained fixed at 2.40 and therefore the household projections have significantly overstated the level of household formation since 2001.
We shall see in the 2010 based household projections – due imminently But if the average household size has stopped falling why? Divorce rates are not falling as far as I am aware, neither has life expectancy fallen?
I would hypothesize that young people are being led into enforced sharing such as living in shared flats and staying longer in the parental home because of the shortage of housing and its high costs. Household formation and the number of houses are not independent variables but mutually independent. This is what demographers call ‘concealed households’ households that would form and will if housing was /becomes less expensive through increasing supply.
Therefore I would not be surprised if household size has stopped falling, but it does not for a moment mean we need less homes – the opposite. Technologically it means in SHMAs as well as projecting forward the ‘flow’ rates of future formation we also need to project forward future rates of flow of changes in concealed households (this is often treated as a one off stock adding to need at base year).