Estimates of additional housing need and demand are key to future planning at a national and regional level. Whilst statisticians produce regular updates to population and household projections, applying this to the need for additional housing is a complex matter and can have important implications for communities and future generations.
Over the past few months, it has become clear that there is a strong user need for up-to-date estimates of additional housing need and demand:
- to inform ongoing housing policy decision making (Housing need has also been identified as a priority work stream by the independent panel for the Review of Affordable Housing Supply)
- to inform the National Development Framework, which will be the 20 year national spatial plan for Wales. The National Development Framework Preferred Option states its policies will identify a national policy based population and housing projection, which will include an all Wales and regional range of housing numbers
- to support assessments of local well-being required under the Well-being of Future Generations (Wales) Act, which requires public bodies to consider the needs of future generations in everything they do.
The latest estimates of future housing need in Wales were published by the Public Policy Institute for Wales in October 2015 and were based on our 2011-based household projections. However, in March 2017 we published more up-to-date 2014-based household projections, and therefore the current housing need estimates are based on household projections which are out of date and do not reflect the latest trends in terms of population and household. The current household projections project an overall lower number of households in Wales each year, and overall lower household growth, when compared to the previous projections.
Understanding housing need is a complex and wide ranging piece of work. Over the past few months, we have reviewed approaches taken elsewhere in the UK to produce estimates of future housing need and demand, and have concluded that an Excel based Housing Need and Demand tool developed by the Scottish Government would meet our requirements.
During the next few months, we plan to use this tool to produce an overall estimate of the future need for additional homes in Wales. This will be based on:
- estimates of newly forming households that will require additional housing units (household projections)
- estimates of existing unmet need for additional housing units.
The overall estimate will be broken down by tenure:
- Rent Private Sector
- Below market rent
- Social rent
using assumptions about future income, house and rent prices.
In order to emphasise the uncertainty associated with these figures, we will publish a range of different scenarios.
The estimate of housing need will be published as official statistics and will adhere to the Code of Practice for Statistics. These will be important data for a range of users and therefore we want to have the right involvement in undertaking this work. Methodological decisions will be taken by Welsh Government analysts with the support of an external Stakeholder group which includes experts from local government.
We plan to publish overall estimates of housing need at a Wales and regional level by January 2019. Estimates broken down by tenure will be published in Spring 2019.
We would be happy to receive any comments or questions about this work and if you’d like to be kept informed please get in touch.
22 November 2018