Maintenance, Validation and Development of DCLG's Affordability Model


September 2006 to September 2008

PSI researchers:

Background, summary and aims

The Barker Review of Housing Supply recommended the setting of affordability targets at both national and regional levels. The Government accepted the recommendation and, for the purposes of the subsequent modelling project, affordability was defined in terms of the ratio of lower quartile house prices to incomes, although it was recognised that a number of other indicators were also appropriate. Between November 2004 and April 2005, a team led by Professor Geoffrey Meen of the Department of Economics at the University of Reading was commissioned by ODPM to construct an econometric model of the English Government Office Regions.

The aim of the project was to examine the implications of different levels of housing construction for affordability targets, along the lines recommended by the Barker Review of Housing Supply. The final model delivered to ODPM consisted of an integrated model of housing and labour markets, migration and demographic change. The current project arose from aspects of this earlier work. It consists of four workstreams: Tenure choice; Vacancies, Demolitions and Conversions; International Migration and Earnings Distribution. Diana takes part in the Vacancies, Demolitions, Conversions and the Earnings Distribution parts of the project.