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The first stage of research into a new economic model to help estimate the demand and need for social housing in En...
The first stage of research into a new economic model to help estimate the demand and need for social housing in England has been published by the department of environment, transport and the

regions. Further work is now underway to develop this national model

and to explore whether regional variants are possible

Housing minister Hilary Armstrong said, in response to a written


'I have today placed in the library of the house a technical

report on a feasibility study to develop an economic model to help

predict likely demand and need for social housing in England. The

study was commissioned by the department of the environment in

November 1995 and has been carried out by the department of applied

economics at Cambridge University. The study was encouraged by the

work of the select committee on housing need, which also supported

the potential value of economic analysis of housing need.

'Previous estimates of social housing need produced by the

Department were based on the extrapolation of past trends and did not

take explicit account of economic variables. The economic model

developed during this study projects the need for social housing in

England over the period 1996 to 2006, and takes account of key

economic factors such as: unemployment, income growth and interest


'Feeding these variables in to reflect a range of economic

scenarios, it projects their likely impact on household formation,

house prices, housing supply and housing choice. The model also

analyses the cost effectiveness of different forms of support for

households who might need help with their housing costs.

'The model developed during the feasibility study has produced a

range of projections of need for social housing but, as the report

notes, these are not alternative forecasts of need. The projections

are based on a range of assumptions. For example, assuming

macroeconomic growth is high, unemployment low and social housing

construction relatively expensive, the model projects a low' annual

average need for 22,000 lettings. Assuming low macroeconomic growth

and unemployment at 9 per cent, the model predicts a high' annual

average need for 72,000 lettings.

'This economic model is a significant step forward in the

analysis of likely demand and need for social housing. The

department of applied economics have now begun further necessary

research to develop and improve this national model, and to explore

whether regional variants are feasible'.


An Economic Model for the Demand and Need for Social Housing:

Technical Report on a Feasibility Study, ISBN 1 85112 062 9, price

£20, available from Department of the Environment, Transport and the

Regions, Publication Sales Centre, Unit 8, Goldthorpe Industrial

Estate, Goldthorpe, Rotherham, S63 9BL (tel: 01709 891318, fax: 01709


The study was carried out by William Peterson, Cliff Pratten and

James Tatch at the department of applied economics, Cambridge

University. A copy of the executive summary can be obtained from 0171 890 3042.

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