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).

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About andrew lainton

International Urban Planner

Posted on December 8, 2012, in urban planning. Bookmark the permalink. 6 Comments.

  1. Surely “concealed households” is like saying “concealed mink fur coat buyers” of people. What’s interesting is whether or not generally popular alternatives to buyer a charmless house from a volume housebuilder or living in crap rented accommodation with bleak surroundings can be found. One has to be careful about borrowing phrasing.

  2. There are other factors that suggest it has stopped falling more permanently, or at least that the rate of fall should be much lower in future. The biggest of these might be availability of credit, which has expanded beyond belief and beyond its limit in the post war years, and isn’t going to expand from here for at least a generation. The economic malaise that is affecting the western world should not be underestimated and this could well cause very long lasting social change such as shared and intergenerational living, which of course is how humans have lived for the millennia prior to 1945. The baby boom cohort with its sexual liberation and propensity towards female careers has also moved through the demography to a large extent, so that step change has probably ended its impact except to the extent that its women will live longer as you have pointed out. Do you know when household projections will be out?

    • I agree but that implies a massive increase in that old fashioned concept of council housing, which would also supply the injection of aggregate demand we need, or do you agree it is socially desirable to sleep on mums sofa?

      The same argument about a permanent threshold, female employment etc. was used in America, and then when the recession ended it started to rise again, so I don’t agree it holds.

      No I don’t baited breath. I suspect they are shocked at a headline figure of no decrease in household size and looking at implications so as not to undermine governments case about rusing need for housing, which as I set out I think is explainable.

  3. I would not expect CLG to prepare 2010-based household projections using the equivalent population projections. This would be an inefficient use of resources as a result of the 2011 Census data that has emerged since.

    It would be methodologically difficult to prepare 2010-based projections because of the way the supporting population projections use ‘indicative’ revised Mid Year Estimates only from 2006-2010. This would lead to large discontinuities in our previous understanding of household change.

    Furthermore. because Census outputs indicate the previous Mid-Year Estimates had under-counted the England and Wales population as a whole, any 2010-based household projections would not reflect the most recent information.

    I would expect a revised series of household estimates to be published shortly after the revised series of 2002-2010 MYEs are released in 2013. I believe the next set of forward household projections may not be until 2012-based data is prepared that reflects the 2011 Census as a baselines.

    Regarding concealed households, I fully agree with the majority of your reasoning for why their existence (and by definition artificial suppression of total households) may be important. However, I’d like to point out this data is not readily available (i.e. the totals per LA cannot be identified) as part of the 2008-based household projections following the results of this CLG consultation:

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/8563/1665808.pdf

    Perhaps the Census will provide us with a new baseline.

    I would resist the urge to put all eggs in one basket with regards explaining any slowdown in the rate of reduction in average HH size. Whilst ‘sofa-surfers’ must play a part, the increase in birth rates seen in the last two decades will also be paramount. I think we saw a temporary lull in population growth as the average age of first-time mothers increased fairly rapidly in this period. As a result, the implications for smaller-sized households containing only adults were significant. As children have come along later in life, as indicated by new increases in birth rates, you see more of these households becoming larger family units with children that pushes average size upwards (or at least halts the decline). By their nature, previous projections would not pre-empt these changes.

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