How is Britain's ageing population changing its cities?

Some old people. Image: Getty.

Britain’s population is ageing and the implications are wide-ranging. Using population projections to 2036, we can see how this major demographic shift will affect cities and rural areas both in relative (i.e. increasing share of people who are over 65) and absolute terms (i.e. increasing number of older people).

First, a note on methodology. My analysis is based on dependency ratios, a measure of social support need expressed as a ratio of the number of people aged over 65 to that of people between 16 and 64. (A value of 0 per cent means that there are no people over 65 in an area, while a value of 100 per cent means that there are as many people over 65 as there are between 16 and 64.)

I also distinguish between 109 coastal and 271 non-coastal areas. Coastal areas are all those UK local authorities whose territory meets the sea, for whatever length or proportion of the total.

Each local authority is assigned a Rural-Urban Classification score, calculated by the ONS for England and Wales. Using the same approach, it is possible to estimate a score for Scottish local authorities. Urban areas data are based on Primary Urban Areas.

The results

Two trends clearly emerge when analysing dependency ratio at the rural/urban and coastal/non-coastal level. First, in 2036 coastal locations in Britain consistently show higher dependency ratios compared to non-coastal areas. Second, there is an almost linear relationship between an area’s degree of urbanisation and its dependency ratio. Both trends are easily spotted in this chart:

Figure 1: Dependency ratio by local authorities’ degree of urbanisation, unweighted average. Click to expand. Source: ONS, NRS, Statistics for Wales, NLP analysis. 

This rural-urban trend is even more evident in the next chart, which shows how all local authorities in Britain will score in terms of their dependency ratio in 2036, and the proportional increase in number of people over 65 in 2036, compared to 2016 levels. Broadly, a higher degree of urbanisation corresponds to lower dependency ratios, despite higher proportional increases in people over 65 by 2036.

Figure 2: Dependency ratios and increase in older people in Britain’s local authorities, by rural-urban classification. Click to expand.

In short, what is expected to be a national demographic shift will have diverse implications at the local level. Crucially, rural authorities may have more difficulties in providing adequate adult social care in the future, given that in some areas there will be an average of 7 older people for every 10 people of working age. Also, all other things being equal, coastal areas’ finances could be under greater pressure than their non-coastal counterparts.

In theory, adult social care costs should not be as pressing for urban areas. Given their relatively lower dependency ratios (a good proxy for economic activity) and the ability to increase Council Tax by up to 2 per cent each year and to retain business rates from 2020 (see page 4, here), urban areas’ finances could be better placed to meet the increasing pressures of adult social care expenditure –  if not comfortably, at least more so than rural authorities would.

However, cities will likewise face the pressure of planning to house an ageing population. Both in relative terms (see Figure 2 above) and absolute terms (see size of bubbles in Figure 3 below), urban areas will experience the strongest growth in the number of people over 65.

Average dependency ratio by local authorities’ degree of urbanisation and number of people aged over 65 (expressed via size of the bubbles). Click to expand. Source: ONS, NRS, Statistics for Wales, NLP analysis.

Failure to meet the housing needs of this older cohort could lead to future increases in adult social care costs for urban local authorities, which have already been hit by budget cuts since 2009-10 and have almost unanimously increased Council Tax by 2 per cent, once given the opportunity to do so, to meet the rising costs of adult care (again, see page 4 here).

Ageing cities

As Britain grows older its cities age too. Dependency ratios will increase in all of the largest urban areas in Britain between 2016 and 2036. And the substantial absolute increase in the number of older people (from +38 per cent in Birmingham and Leeds to +64 per cent in London; see Figure 4)

Despite this, the influx of younger, working people would keep the increasing dependency ratios relatively low (between 23 per cent in London and 40 per cent in Newcastle) even by 2036.

Dependency ratios and increase in older people in selected urban areas. Click to expand. Source: ONS, NRS, Statistics for Wales, NLP analysis.

One of the main challenges of this increase will be meeting older people’s specialist housing needs, especially at a time when housing costs are rising for all age cohorts and all tenures (albeit at different rates in the North, the Midlands and the South of England).

Almost 4.3m people over 65 will live in Britain’s largest cities by 2036 (up from around 2.9m). National and local governments must ensure that the housing stock will be large enough – and of “good enough” quality – to accommodate them all, as the cost of not meeting these needs would be borne by local authorities via adult social care expenditure.

In sum, the same demographic shift is expected to impact differently on cities than it will on rural areas – and on coastal locations compared to non-coastal ones. Urban areas are likely to see pressure on their housing market increase, while rural areas will need to find solutions to cover rising adult social care costs, as older people will make up an increasing share of the local population.

This challenge highlights the difficulty of devising a national housing policy, since any intervention by the government will have implications for local governments’ finances and for the housing market. Building more homes may not be the single solution to solve Britain’s ageing-related issues, but it does seem a very sensible starting point.

Francesco Mellino is a research consultant at Nathaniel Lichfield & Partners. This article was originally posted on the planning consultancy's blog.

To gain a fuller picture of the implications of an ageing population in Great Britain, you can also read our Research Note.


Meet the YIMBY campaigners hoping to ease the housing crisis

Some houses, being built. Image: Getty.

The nimby is a wearily familiar political breed. Though individuals may support new housing and infrastructure projects in theory, they oppose them in practice (“not in my backyard”). For fear of consequences such as a fall in property values, locals reliably revolt against proposed developments – and politicians retreat. The net result is that cities and countries are denied the housing they need. For the past decade, the UK has fallen far short of the 250,000 new homes required annually to meet demand.

But the nimby has now met its dialectical opposite: the yimby. In contrast to their opponents, yimbys not merely tolerate but welcome development (“yes in my backyard”). The earliest known usage of yimby was in a 1988 New York Times article (“Coping in the Age of Nimby”) and the first organisation was founded in 2007 (Yimby Stockholm). Sister groups have since been established in Toronto, San Francisco, Sao Paulo, Sydney, Helsinki and, most recently, London.

John Myers, a 44-year-old former barrister and financial analyst, co-founded London Yimby with four others last year. They were inspired by the capital’s dysfunctional property market (London is the most expensive major global city for buying or renting) and the success of groups elsewhere.

“We saw what was happening in the States,” Myers said when we spoke. “The San Francisco group has just had three new laws passed in California to get more housing built. There are now more than 30 US cities with yimby groups… There really is a feeling in the air that something has to be done.” Myers lives in a small mortgaged house in Camden, north London, but most of the group’s volunteers are private or social housing tenants and range from “the very young to retired grandparents”.

“The big problem with the housing crisis,” Myers told me, “the dirty little secret that politicians don’t like to talk about is that, actually, people quite like house prices to go up.”

In 2013, shortly after launching the Help to Buy scheme, the former chancellor George Osborne told the cabinet: “Hopefully we will get a little housing boom and everyone will be happy as property values go up” (the average London house now costs £484,362). Though the exorbitant price of housing (such that there are now more outright owners than mortgagors) has become an electoral problem for the Tories, homeowners remain an obstacle to development.

In a recent report for the Adam Smith Institute (“Yes In My Back Yard”), Myers made three proposals to win over this bloc: allowing individual streets to grant themselves planning permission to extend or replace buildings; permitting local parishes to develop “ugly or low amenity” sections of the green belt; and devolving planning powers to city-region mayors.

“There are ways to get support from local people for high-quality developments but we have a system right now that doesn’t try and get that support,” Myers said. “It just imposes measures from the top down.”

In some US cities, yimbys have antagonised anti-gentrification campaigners by supporting luxury developments. There is a tension between the aim of greater supply and that of greater affordability. Myers argued that it was crucial to have “clear rules on what percentage [of affordable housing] is required up front, so it gets priced into the land and taken out of the landowner’s pocket”.

The replacement of stamp duty with a land value tax, he added, would leave both “the buyer and the seller better off: the buyer doesn’t have to scrape a deposit together and the seller doesn’t have the price reduced by the amount of stamp duty”.

That some Conservatives are now prepared to consider previously heretical measures such as building on the green belt and borrowing £50bn for housing investment may herald a new era. The yimby bulldozer is beginning to dislodge the nimbys from their privileged perch. 

This article previously appeared in our sister title, the New Statesman.

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