Three big trends emerge from the Government's newly published projections of household growth for the next 20 years.

First, we will see fewer family homes. By 2026, it is predicted that they will make up just over half of all households - down from nearly two-thirds in 2003.

Second, we will see a lot more older, single people. It is forecast that nearly three quarters of household growth will be in one-person households.

More than half of these householders are expected to be 45 or over and nearly a quarter 55-64.

Why? The big driver is people living alone for longer. Think-tank the Institute for Public Policy Research (IPPR) found that living alone has become a rite of passage for younger people, with 97 per cent of 25 to 34-year-olds wanting to live alone before settling down. What these new government figures show is the other side of the story: older people living alone, often after relationships founder.

Third, these trends will increase housing demand, especially in big cities, according to the projections. The Government's State of the English Cities report also shows English cities are increasing their share of people and jobs.

Cities need to get ready for these developing trends. Where will the new households go? How should cities make use of brownfield and avoid sprawl? And how can they cater more for older singles?

To date, as IPPR's City People research in Liverpool and Manchester found, plans for city centre living has been largely built on young singles who don't stay long. Very few older singles have so far made the city centre their home. The new figures suggest cities need to focus on older singles.

In future, some city centres could 'go grey', with older singles leading the way. Manchester's Castlefield and Liverpool's Docklands are both potential grey zones - their age profiles are already rising.

Older residents are likely to be drawn by the convenience of city living.

But city centres are not currently geared up for older singles, and to tap into this market they will need to make their cores look and feel very different. This will be expensive, and risky: there is no guarantee that older people will take the bait, and it may drive young singles away.

A safer bet would be to focus housing growth on inner ring neighbourhoods which offer a better match of regeneration need and market opportunity.

Right now they do not compete with popular suburbs, but they have the potential to become neighbourhoods of choice for a mix of key workers, families and older singles.

The key is to micro-plan: start small, identify a clear neighbourhood 'offer' - and then deliver it. The IPPR research identifies clear priorities for all groups, not just older singles. These are security, space and design, services - especially health centres, schools and convenience shopping - and a sense of community.

What would an attractive inner urban 'grey neighbourhood' look like?

It could be a form of grown-up city living, or simply a good suburban offer. Most older singles will be owners, not renters and will look for houses, not flats - many will be downsizing, after all. They will also look for a cultural offer that isn't just about shopping and clubbing - places such as theatres, concert halls and good restaurants. People come from all over the region to use Manchester's Bridgewater Hall or Birmingham's Rep Theatre. The challenge is to get these users living in the city, not just coming in for nights out.

Beyond this, we just don't know. But we need to begin finding out. Demographics are beginning to create new markets in our cities. Smart cities and canny developers should start thinking hard about going grey.