Intelligence: 25 May 2018New population projections indicate slower growth

The 2016-based Sub National Population Projections (SNPP) published by the Office for National Statistics (ONS) on 24 May 2018 provide projected population growth for each local authority in England over the 25-year period 2016-2041, consistent with the previously released 2016-based National Population Projections (published 26 October 2017).

However, despite the projections being available for a 25-year period, it is in fact the growth projected over the first 10-years which is of most interest.  That is because, the Government’s proposed Standard Method for assessing housing need looks at projected population and household growth in individual local authorities over a 10-year period.  Whilst the 10-year period may change upon implementation of the Standard Method (expected November/ December 2018), we consider growth over the 10-year period 2016-2026 to provide consistency with the Standard Method draft proposals.  

10-year growth according to the 2016-based SNPP

Population growth in England is projected to increase at an average of 5.9% over the 10-year period 2016-2026, 139 authorities (43%) are projected to see a higher rate of growth. The London Borough of Tower Hamlets is projected to experience the highest rate of population growth (17.8%).

15 local authorities are projected to see a decline in population between 2016-2026, all of which are located in Northern England.  City of London is projected to experience the highest rate of population decline (13.1%).

Click on the individual areas in the interactive map below to understand the absolute and rate of population change projected by the latest 2016-based SNPP in each local authority.

2016 SNPP

Comparison to the previous 2014-based SNPP

At both a national and regional level, the 2016-based SNPP project lower population growth over a 10-year period than the previous 2014-based SNPP as is illustrated in the table below.

 

Source: ONS/ Barton Willmore

The lower level of projected population growth in the 2016-based series is the result of a lower assumed level of both natural change and net international migration nationally.  However, the reasons for the change do vary between regions and at a local authority level.  The significant reduction in London’s projected population does lead us to question whether the reduction is the impact of reduced migration, affordability constraints or low levels of past housing delivery?

Despite lower population growth projected nationally and regionally according to the 2016-based SNPP, 72 local authorities (22%) are projected to have higher population growth under the 2016-based SNPP than projected under the previous 2014-based series.  These local authorities are represented on the map below with the colour green.  East Devon is projected to see the greatest proportional increase in projected population growth (+2.3 percentage points).

In contrast, the majority of local authorities (78%) are projected to see lower population growth over the 10-year period 2016-2026 according to the 2016-based SNPP.  These local authorities are represented on the map below with the colour blue. Excluding the City of London, the London Borough of Hounslow is projected to see the greatest proportional decrease in projected population growth (-6.0 percentage points).

Click on the individual areas in the interactive map below to understand the 10-year growth projected by both the 2014 and 2016-based SNPP and the absolute and percentage difference. 

2014/ 2016 SNPP comparison

The implications for housing need

The 2016-based SNPP will be used to produce the 2016-based household projections which will inform the Government’s local housing need assessments once the Standard Method is fully implemented (6 months following adoption of the revised National Planning Policy Framework).

On the face of it, the new 2016-based SNPP suggest that housing need will reduce from assessments underpinned by the 2014-based SNPP due to the lower rate of population growth projected by the 2016-based SNPP.  However, as our initial analysis presented above has indicated, the picture is not quite so clear cut and some authorities are likely to see housing need increase under the new population projections.

Nonetheless, the full implications of the 2016-based SNPP on housing need cannot be predicted at this stage because we do not know what changes the Government will make in relation to the household formation rate assumptions which are used to convert population growth into household growth, which in turn is used to determine housing need.  Therefore, we eagerly await the release of the 2016-based household projections in September 2018.

However, these new projections do suggest that there is real danger that the Government’s 300,000 homes target will be undermined if lower population growth translates into reduced housing need.

Furthermore, population growth in the north of the country is significantly less than in the south, a divide that is likely to be exacerbated when converted into housing need using the Standard Method.

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Sub National Population Projections, SNPP, ONS, Development Economics