Incorporating recent trends in household formation into household projections for Scotland

Esther Roughsedge

Household Estimates and Projections BranchNational Records of Scotland (NRS)

November 2014

Outline

• Introduction to household projections for Scotland.

• Long-term trends in household formation.• Recent trends.• Changes to the projections methodology for

the 2012-base household projections.• Results• Other relevant trends

What are household projections?

• Produced every two years – most recent set 2012-based.

• Projections of the number of households 25 years into the future, by:– Council area

– Age of head of household

– Household type

• Projections are based on past trends. They are not forecasts – we don’t attempt to account for future economic or social changes.

• Used for informing planning decisions

• Lots of overlaps in the trends and methods used in different parts of the UK.

Trends in household formation

Household numbers rising faster than population…

-1%0%1%2%3%4%5%6%7%8%9%

10%11%12%13%14%15%16%17%18%

1991 1996 2001 2006 2011

Per

cen

tag

e ch

ang

e si

nce

199

1

Year

By 2013 there were almost 18% more households than in 1991

In constrast, the population was just under 5 per cent higher

…more people living alone and in smaller households…

…but annual household growth has levelled off recently…

0

5,000

10,000

15,000

20,000

25,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

An

nu

al i

ncr

ease

in

nu

mb

er o

f h

ou

seh

old

s

Year

Vacant and secondhomes decreased in

2013, largely due to re-classification, causing

an apparent increase in the number of households.

Economic downturn began

…and the fall in average household size has levelled off

2.12

2.14

2.16

2.18

2.20

2.22

2.24

2.26

2.28

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Ave

rag

e h

ou

seh

old

siz

e

Year

Rate of decline slowed even further after the onset of the economic downturn

Economic downturn began

Average household size falling but beginng to slow even before the reconomic downturn

What impact have these trends had on the household projections?

Households by type 1991, 2001 & 2011…

…including the 2011 Census data

• So in the 2010-based projections we:– Over-projected the increase in smaller

household types– Over-projected the reduction in larger

household types.– Over-projected the total increase in household

numbers.• The trends in household formation were

based on the 1991 and 2001 Censuses only.

• We produced a number of variants, including an ‘alternative headship’ variant projection, which was more accurate.

For the 2012-based projections data from the 2011 Census was

available.

So we reviewed our method to decide how best to include this

data (and possibly other sources)

How are the household projections produced?

Household projections method

• Take NRS population projections; • Subtract population living in communal

establishments, e.g. student halls, barracks, care home);

• Project forward information on household type (‘headship rates’), e.g. single adult, two adults plus children– Used to use two censuses (1991 and 2001). Used a

modified 2-point exponential function.– Now we have the 2011 Census available as well.

Old method - trends based on 1991 and 2001 Censuses

1981 1991 2001 2011 2021 2031 2041

Year

Census1991-2001

2011 Census data – change in trends

1981 1991 2001 2011 2021 2031 2041

Year

Census1991-2001

Project forward newer trends only?

1981 1991 2001 2011 2021 2031 2041

Year

Census1991-20012001-2011

Project longer term trend only?

1981 1991 2001 2011 2021 2031 2041

Year

Census

1991-2001

2001-2011

1991-2011

Incorporate both recent and longer term trends - weighted using survey data

1981 1991 2001 2011 2021 2031 2041

Year

Census

1991-2001

2001-2011

Weighted

1991-2011

New method of projecting household type• To make use of three censuses, two sets of projected

headship rates were produced using the modified two-point exponential model.

i. Using 1991 and 2001 Censuses

ii. Using 2001 and 2011 Censuses

• They were combined into a single set of headship rates, using survey data from the Scottish Household Survey.

• Weights chosen to minimise the difference between the survey data and the household projection.• For 2012 the weights were 0.75 towards 2001-2011 and 0.25

towards 1991-2001.

• Allows up-to-date household type data to be included into the projections.

– Increasingly important as we move further away from the last census.

Calculate the household projection

Number of heads of household =

Private household population * Headship rate

• This is done for each area, age group and household type for

each year • Number of heads of household => number of households• We make some adjustments to ensure consistency with

population projections and household estimates, which are based on Council Tax data.

• Unchanged since previous projections.

Household projections results

Average household size is falling…

The population is ageing…

And older people are most likely to live alone

How have the trends changed since the previous projections?

The new set of projections are lower than the previous set

• 2010-based household projections (previous projections):• +23% over next 25 years• 531,000 new households (21,200/year)

• 2012-based household projections (new projections):• +17% over next 25 years • 396,000 new households (15,800/year)

Comparison with 2010-based projections

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2002 2007 2012 2017 2022 2027 2032 2037

Nu

mb

ero

f h

ou

seh

old

s

Year

Household estimates

2010-based principal projection2010-based alternative headship projection

2012-based principal projection

Increase in young males living alone is smaller than previously projected, also applies to young females

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+

Nu

mb

er o

f H

ou

seh

old

s

Age Group

1 adult: male2012 in 2012-based projection

2035 in 2010-based projection

2035 in 2012-based projection

Reduction in 3+ adult households headed by 45-64yr olds is lower than projected previously.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+

Nu

mb

er o

f H

ou

seh

old

s

Age Group

3+ adults

2012 in 2012-based projection

2035 in 2010-based projection

2035 in 2012-based projection

Other relevant trends

Young adults

Source: Census

Young adults

More young adults are living with

parents, and fewer are living as a

couple

Source: Census

Tenure by age, 2001 & 2011

Source: Census

Tenure by age, 2001 & 2011

Source: Census

Tenure by age, 2001 & 2011

Source: Census

Trends in house-building

Source: Scottish Government Housing Statistics for Scotland 2014

Summary - Method

• Over the past decade the growth in household numbers has slowed.

• Our previous projections didn’t fully capture this trend as they used only 1991 and 2001 Censuses.

• 2012-based projections use 1991, 2001 and 2011 Censuses and survey data for weighting – they include recent and longer-term trends.

Summary - Results• Household numbers are still increasing,

but by less than in previous projections.

• Biggest changes are among young adults:– Fewer living alone or in couples.– More living with parents.– More renting.

Contact details

• Esther.Roughsedge@gro-scotland.gsi.gov.uk• Tel 0131 3144251• www.nrscotland.gov.uk• Register for updates on ScotStat at

www.scotland.gov.uk/Topics/Statistics/ scotstat

• Do contact us if you want to know more!