In a previous blog (Why population projections are so important in housing planning) we looked at how the national population projections had changed between the 2014-based assessment and the most up to date 2016-based assessment. Lower birth rates and lower life expectancy, as well as reduced international immigration figures, mean that the 2016-based population projections are substantially lower than those produced just two years earlier.

Key to the planning of housing, as well as other services, is how these changes play out at a local level in the subnational population projections. The map below shows the difference between the 2014 and 2016-based 10-year population growth projections to 2026 as a percentage of current population.

In the blue areas population growth is actually now expected to be higher than was previously the case. But nowhere is the increase more than 2 per cent of the current population.

More significantly, the decrease exceeds 2 per cent of population across most of London, the Home Counties and parts of the South East – all locations where housing affordability is most stretched and housing need at its greatest.

Shift in projected population change

^{Source: ONS}

Taking Cambridge as an example:

The numbers can vary widely at a local level. Across Cambridgeshire, for example, population projections have been revised downwards and nowhere more so than in Cambridge itself, where the projected population for 2026 has dropped 10 per cent, from 138,000 to 125,000 people.

That may not look a huge discrepancy, but for Cambridge this creates issues for those anticipating housing need, demand for schools, hospitals, transport, and so on. Multiply this across the country and you begin to understand the importance of accurate population projections.

The graph below looks at the Cambridge example more closely. The 2016-based projections expect natural change to be at half the rate in 2026 as was expected in 2014-based projections.

International migration is now expected to cease contributing to a rising population by 2020 and is set to represent a net negative for Cambridge’s population growth by 2023. Net international migration into Cambridge has averaged 600 per year since 2002. The 2016 projections expect that to fall to just 34 per year in the 10 years to 2026.

Net internal migration from the rest of the UK has been negative, with an average of 1,000 people leaving Cambridge every year since 2002. But the 2016-based projections suggest this will end by 2024 and the following 10 years will see an average 200 people each year moving into Cambridge from other parts of the UK.

But perhaps the starkest change in the Cambridge projection is the ‘Other’ category – the unexplained. Between 2002 and 2011 the population increased by 13,200, 35 per cent of which is unexplained. How should the projections account for this? Has there been unrecorded population growth in Cambridge since the 2011 Census? It certainly seems likely, as otherwise population growth in Cambridge suddenly slowed in 2011 for no clear reason.

Actual and projected population change in Cambridge, comparing 2014 with 2016-based projections

^{Source: ONS}

These numbers will feed through into the household projections and so into the minimum housing need figure that comes out of MHCLG’s new standard methodology. And it looks like this will mean the minimum housing need for Cambridge will be much lower than it is now. This hardly seems plausible when Cambridge is one of the least affordable housing markets in England.

While no-one wants to see a return to the interminable debates of housing need numbers at local plan examinations, it would be worse for Cambridge to end up with a local plan target that won’t help ease affordability pressures in the city.  Perhaps the alternative is for the ONS projections to be scrutinised a bit harder, to avoid such implausible results being produced.

Read the other blogs in this series: 

Why population projections are so important in house planning

Using shorter-term trends will result in reduced housing need figures

Further information

Contact Savills Research or read more on housing shortage