HL Deb 14 January 1998 vol 584 c204WA
Lord Bassam of Brighton

asked Her Majesty's Government:

Whether they will publish the technical report on the feasibility study into a new economic model to help estimate the demand and need for social housing in England. [HL123]

Baroness Hayman

We have today placed in the Library of the House a technical report on a feasibility study to develop an economic model to help predict likely demand and need for social housing in England. The study was commissioned by the Department of the Environment in November 1995 and has been carried out by the Department of Applied Economics at Cambridge University. The study was encouraged by the work of the Select Committee on Housing Need, which also supported the potential value of economic analysis of housing need.

Previous estimates of social housing need produced by the department were based on the extrapolation of past trends and did not take explicit account of economic variables. The economic model developed during this study projects the need for social housing in England over the period 1996 to 2006, and takes account of key economic factors such as unemployment, income growth and interest rates. Feeding these variables in to reflect a range of economic scenarios, it projects their likely impact on household formation, house prices, housing supply and housing choice. The model also analyses the cost effectiveness of different forms of support for households who might need help with their housing costs.

The model developed during the feasibility study has produced a range of projections of need for social housing but, as the report notes. these are not alternative forecasts of need. The projections are based on a range of assumptions. For example, assuming macroeconomic growth is high, unemployment low and social housing construction relatively expensive, the model projects a "low" annual average need for 22,000 lettings. Assuming low macroeconomic growth and unemployment at 9 per cent., the model predicts a "high" annual average need for 72.000 lettings.

This economic model is a significant step forward in the analysis of likely demand and need for social housing. The Department of Applied Economics have now begun further necessary research to develop and improve this national model, and to explore whether regional variants are feasible.