The government is set to ignore a proposed reduction in the number of homes it thinks should be built each year which would have had a major impact on about 150 councils’ housing plans.
Housing minister Kit Malthouse said the decision will provide “stability and certainty” for councils and means the government still retains an ambition of building 300,000 new homes a year by the middle of the next decade.
Statistics published by the Office of National Statistics last month reduced the projected rate of household formation by 53,000 a year between 2018 and 2028. Using those estimates as a benchmark it would have reduced the number of homes the government expects areas to build from 269,000 homes a year to about 213,000 homes a year. That is fewer than the 217,350 homes built last year.
In a technical consultation on updates to national planning policy and guidance, the Ministry of Housing, Communities & Local Government said: “The government has considered whether it needs to change its aspirations for housing supply in light of the new household projections, and in particular whether these imply that 53,000 fewer homes are needed each year than previously thought. It has decided it is not right to change its aspirations.”
The ministry argued a proposed reduction of 23,000 homes in the ONS’s estimates was attributed to changes to the way population changes are converted into estimates for household formation.
“Methodological changes are not a reason why the government should change its aspirations,” it said, and added household projections are also “constrained” by a lack of housing.
“If new, additional homes are not supplied, then households cannot form as there would be nowhere for them to live.”
The ministry added using the new household projections would result in 146 councils seeing “changes in their local housing need of more than 20%” compared to what had previously been proposed in September last year. By maintaining the status quo just 16 councils are expected to experience changes of more than 20%.
The current estimates fall below the government’s target of building 300,000 new homes a year. The ministry said: “However, the number of homes permitted generally exceeds that provided for in plans, while the gap can also be bridged by ambitious authorities going above their local housing need, including through housing deals with the government, in regions like the Cambridge-Milton Keynes-Oxford corridor where significant national infrastructure investment to support productivity growth should also enable increased housing supply and through homes delivered through permitted development rights.”
Mr Malthouse said: “We must tackle the historic shortage of new homes and restore the dream of ownership for the next generation.
“To do this we must build more and better homes, faster and are committed to delivering 300,000 homes a year by the mid-2020s.
“These proposals maintain this commitment and crucially gives stability and certainty for local authorities, so they can get on with the job of building the homes their communities need.”
The consultation, which closes on 7 December, also proposes tightening the definition around what sites for housing are “deliverable”.