Population growth and house prices strongly linked
Monday, 26 Feb 2007 11:04
London has the highest number of Brits are moving out
Strong links between population growth and house prices mean some parts of the country will have consistently above average price rises, new research shows.
Analysis by Propertyfinder.com finds in seven out of ten cases, regional population growth and house price growth match up.
This means property investors could learn the best areas to buy from looking at migration and immigration.
However, the research does highlight some exceptions, with the north-east in particular bucking the trend. By excluding the region, population and house price growth show close links in 94 per cent of cases.
"The overall level of house prices depends largely on the wider economy. However the relative strength of regional housing markets is very clearly due in large part to population movement," commented Propertyfinder chief executive Warren Bright.
"Whether it is people wanting to buy their own home to live in, or investors providing rental accommodation to newcomers, demand for housing in the most popular regions has caused prices to rise the fastest.
"While these population trends continue, our research suggests that the best performing regions which have been attracting the most migrants will continue to see house prices outperform over the medium term."
For those immigrating to the UK, the top locations are London (36 per cent), the south-east (12 per cent), and the east (eight per cent), the research reveals.
London also has the highest number of Brits moving out. The most popular locations for Londoners are the south-west (0.67 per cent), Wales (0.48 per cent) and the East Midlands (0.42 per cent).
"UK residents of England's two biggest cities, London and Birmingham, are clearly keen to seek a life in a less hectic environment and are moving away from these regions," Mr Bright added.
"The figures for London show extraordinarily high turnover in population. Newcomers from abroad are attracted to Britain's big cities where work is easy to come by.
"After a time, city life can be pretty draining and once people are established they seek a less hectic life elsewhere and move out."