The latest government projections show that only 3.8 million new homes will be required from 1996 to 2021. The previous projection, for 1991-2016, was 4.4 million new households and this had been expected to rise. Redrow group managing director Paul Pedley said that even a reduced figure was evidence of a strong housing market.
Pedley said: "The underlying message is that there is still a need for about 175 000 homes to be built per annum, and that is good news for the industry.
"The government figures are just broad brush strokes. It was strongly rumoured that the new figure would rise to 5 million and instead it's come out at 3.8. What's important is that the numbers confirm a strong market that is going forward." Announcing the new figure this week, Prescott said the reason for the reduction was the rise in the number of cohabiting couples shown in government figures.
He added that there would still be a need for housing on greenfield sites but insisted that the government expects to meet its 60% brownfield target. Prescott said: "This is not the huge boom of households people were expecting. But we still need to think creatively about where growth occurs."Recent evidence has shown that cohabitation is increasing at a faster rate than expected, leading to a greater increase in the number of couple households by 2016 than was assumed in the previous projections," he said.
About 80% of the 4.4 million households were for single people, so even a small change in the number cohabiting could affect the figure, Prescott explained.
He stressed that the figures were projections rather than forecasts or estimates. "They are not a firm guide to what will actually happen. The figures are based on what might be expected to occur if trends continue. Such trends can and do change as a result of demographic or economic factors, as the new cohabiting assumptions show," he said. He warned that the figures should not drive the housing debate and emphasised that the government still wants to harness growth and bring life back to towns and cities.