‘Fewer new homes will need to be built’

THE Government’s housing target may be too high, economists have suggested, after new figures projected fewer new family groups than previously thought.

Last year’s Budget set out plans to build 300,000 new homes a year, which Chancellor Philip Hammond said would help younger people on to the property ladder.

In a report released yesterday, the Office for National Statistics (ONS) revised its estimate, made in 2014, which suggested 210,000 new households would be formed per year, down to 159,000 per year.

Joanna Harkrader, of the ONS’S centre for ageing and demography, said the change “reflects lower projections of the population – notably assumptions around future births, how long we’ll live and migration – and more up-to-date figures about living arrangements, such as living with parents or cohabiting.”

Ian Mulheirn, Oxford Economics’ director of consulting, said the figures showed “hysterical” discussions on housing shortages had been “misplaced”. Government projections were “way over the top, and the actual rate . . . has been much lower”.

The figures suggest households headed by over 85-year-olds will more than double by 2041, to 2.04million. Younger households are set to stay the same or even fall.