Flight from the north

Do reports of low demand for social housing and sometimes private housing in some cities and towns in the north of England demonstrate that estimates of a 4.1 million increase in households in England over a 25-year period are much too high? And that figures in the region of 90,000 a year for the need for affordable housing are also too high?

Positive answers to those questions would be welcome in many quarters for obvious reasons. But our study Low Demand: Separating Fact from Fiction published today by the Chartered Institute of Housing and the Joseph Rowntree Foundation, shows that in reality the national estimates of future household numbers and of need for affordable housing are not called into question by the reported instances of low demand. Localities where houses cannot be let because demand is too low are fact: that they contradict the big picture of households and housing need in England as a whole is thus far fiction.

Low demand means different things in different places. The extreme and the only version which could call into question estimates of the need for affordable housing, is as described by Anne Power and Katharine Mumford in The Slow Death of Great Cities. They describe parts of Newcastle and Manchester where houses and flats belonging to local authorities and housing associations cannot be let for lack of tenants and there are houses that no one will buy. The term appears also to be used, though, to refer to housing that is unpopular and which tenants with an ability to choose will not take if they can help it. How common this is varies with pressure of demand. Low demand indeed can connote a less tangible sense of a lack of pressure for tenancies. The numerical evidence of low demand commonly cited is high and rising vacancy rates and for local authorities, large numbers of lettings to new tenants relative to stock. Large numbers of lettings to new tenants are not in themselves evidence of low demand: they are evidence of a demand being met. But where new building is minimal, a high level of new lettings demonstrates a high rate of departures, which is a sign of weaker demand.

Our research examines the changes in vacancy rates and departures region by region in 1990s up to 1997/8 as published by the Department of the Environment, Transport and the Regions from local authorities' annual Housing Investment Programme (HIP) returns, and places them in the context of national and regional population changes. Population change is the first place to look for evidence of any fundamental shift in housing demand and need. Between 1991 and 1996 the population of England aged 16 and over grew by 100,000 more than previously estimated, as a result of higher net inward migration from overseas. The population increase was however more heavily concentrated in the south of England than expected. The total population in the south of England grew by 100,000 more than previously estimated, but in the north by 60,000 less.

Migration from the north of England to the south increased in the course of the 1990s. Net migration from the north of England to the rest of the UK averaged just under 10,000 a year in 1991-3 but nearly 24,000 a year in 1994 to 1997. There is no evidence here of any fundamental shift at national level in the demographic basis of housing demand and need. The most recent estimate of the number of households in 1996 is a few thousand higher than the figure that was part of the household projection that was the source of the original 4.4 million estimate. The demographic contrast between north and south is mirrored in the symptoms of strength of demand for local authority housing. The overall vacancy rate for the regions of the north of England taken together rose from 2.2 per cent in 1994 to 3.4 per cent in 1998, whereas in the south of England outside London the increase was from 1.2 per cent to 1.3 per cent only.

Similarly departures from local authority housing (as estimated from lettings to new tenants and the change in vacancies) rose by 29,000 a year between 1993/4 and 1997/8 in the north of England and by 10,000 a year in the midlands, but by only 1,000 a year in the south outside London.

There are nevertheless considerable variations in vacancy rates and departures within the north. As well as authorities with high vacancy rates such as Liverpool (7.4 per cent in 1997), Blackburn (7.1 per cent), Burnley (5.6 per cent) and Bradford (5.2), there were 32 authorities with vacancy rates of 2 per cent or less, out of 82 in total excluding those that had transferred their whole stock. A study was made of whether as between local authority areas comparatively high vacancy and departure rates were associated with low house prices. Signs were found of such an association, but with too many exceptions for any very confident generalisations.

Although most of the concern about low demand has been about local authority and housing association housing, there have been references to collapsing demand for house purchase as well. These again appear to be about particular localities and not any general falling away of demand for house purchase in the north. Relevant here is that when the housing market came out of the slump of the early 1990s, the increase in the number of new dwellings started for private owners was proportionally as great in the north as in the south. There was no return to the high proportion of private house building in the south that occured in the boom of the 1980s. That is the reverse of what would have happened if there had been any general weakening of private housing demand in the north.

Our conclusion is that there has been no fundamental shift in housing demand and need. There has been a demographically-based shift in the geography of demand and need towards the south of England, and a reduction in pressure of demand for rented housing in some parts of the north, but not all. A lower pressure of demand means fewer queues and more scope for choice, which some households have exercised in favour of renting from private landlords rather than local authorities. When other households are moving away that can lead to localised surpluses of social rented housing. That is in no way inconsistent with the "big picture" of substantial increases in the number of households and hence high levels of housing demand and need.