Setting the scene – evidence of changing household behaviour?

Christine M E Whitehead LSE London

HEIF Event: the new population and household projections: implications for London

LSE, 1 July 2013

Some History

• Household projections for many years consistently underestimated actual growth in household numbers from given population

• Main reasons: longevity; age structure; income growth – we don’t like living together ;

• However in 2000s, household projections started to overestimate household growth – particularly in London

By the mid 2000s• Suggested projections were overestimating actual household

formation between 2001 and 2006 by between 35,000 and 40,000 households per annum

• Two main reasons: - high levels of in-migration assumed but recent immigrants form fewer households during the first few years;

- housing market pressures reducing the capacity to set up as separate households especially in high cost areas such as London (household formation among younger households started to drop in 1990s)

• By the 2008 based projections stronger evidence of both the impact of recession and of in-migrant impacts – but no capacity to adjust projections

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The Big Differences in 2011

• Population higher than ‘expected’ plus half a million

• Number of households lower – minus 375,000• Some concern that 2001 population was too low

so trajectories are difficult to discern• Large differences in household types - notably

one person, couples plus adult and other multi-person households

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Long term trend in household size

• Census 2011 found more people but fewer households than expected.

• No fall in household size, despite ageing population

• What were the changes?

• A new trend or a blip?

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Household type changes 2001 - 2011

• Couples with no other adults. Projected tend change +428,000; actual increase +314,000.Partly offset by

• Couples with one or more other adults. Projected trend change -365,000, actual change +218,000.

• Lone-parent households. Projected trend change +373,000, actual change +274,000.

• Other multi-person households. Projected trend change -40,000, actual change +291,000.

• One-person households. Projected change +1,469,000, actual change +481,000.

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Household Projections and Estimates for England 1991-2021

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1991 2001 2011 2021

2008-based

Couple, no other adult 8852 9151 9579 10252

Couple, one or more other adult 2779 2290 1925 1697

(All couples) (11631) (11441) (11504) (11949)

Lone parents 982 1438 1811 2292

Other multi-person households 1499 1341 1301 1264

One-person households 5052 6304 7773 9340

All households 19164 20523 22389 24943

2011-based

Couple, no other adult 8852 9151 9465 10065

Couple, one or more other adult 2779 2290 2508 2781

(All couples) (11631) (11441) (11973) (12846)

Lone parents 982 1438 1712 2114

Other multi-person households 1499 1341 1632 1956

One-person households 5052 6304 6785 7392

All households 19164 20523 22102 24307

Differences between Trend Projection and Actual Change 2001 – 2011

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Couples with one or more other adults

+583,000

Other multi-persons households

+331,000

One-person households -988,000

Total difference (excluding impact of higher population)

- 74,000

Easy Explanations: Demographics?

• Since 2001, 30 years of continuity broken • Younger people unable to form separate households

because of debt; house prices and rents; uncertainties about employment etc

• Living with their parents or in multi –adult households in the prs

• Impacts on the household structure of older households• But the growth in multi-person households concentrated

in middle age and also changes in older household behaviour which aren’t just about men living longer

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Easy Explanations: Economics and Social

• Recession and the depressed housing market has done little to improve affordability in pressure areas

• Uncertainties around employment opportunities• Difficult access to the owner-occupied market• Those in the prs consume less housing as compared

to equivalent people in owner-occupation• Fewer separations /more re-partnering among 35 –

60s• Little direct evidence on causes

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Using these figures for projections• How much notice to take of 2011?• Is it an outcome of recession and other shorter

term issues?• Is it partly an outcome of housing market issues –

affordability/shortages?• A 3 point or a 2 point projection • Shorter term v longer term trends – will we

return to ‘normal’ or is (to be annoying) the new normal? – or more likely somewhere in between

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Conclusions: Planning in a period of uncertainty

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• We need a baseline for assessing future needs – for all types of social services and financial allocations , not just housing

• Projections must assume past economic trends – but a major issue when turning points

• Could we use a behavioural model a la Barker/Meen – equally problematic but more behavioural

• Major risks in planning for the next decade as if it were an extension of the 2000s

• Cannot know either about economic outcomes let alone capacity to form separate households - so are we just guessing?