TheComment
Jon Neale is a director of residential research at Jones Lang LaSalle
Population grows through immigration… and a baby boom
Jon Neale says there are big issues around changing needs. T
here are 500,000 more people living in England and Wales than the Government previously
thought, at least according to the first results from the 2011 census. There were 3.7m more people in the two countries than just a decade previously – equivalent to an increase of 7.2 per cent. That’s quite a staggering figure, meaning the population is expanding at the fastest rate since the first census in 1801, a period that includes the height of the industrial revolution. As expected, some of the usual suspects in the press have used the results to attack immigration policy. But while the number of people entering and leaving the country is undeniable one of the reasons for such rapid growth, there are actually two other factors that are more important. Firstly, we are all living longer.
Life expectancy continues to increase, and now one in six people are aged 65 or over. If we project forward current rates of change, that will increase to one in four by 2050. Secondly, and perhaps more
importantly, there has been a bit of a baby boom in recent years, which has taken place right across society. Professional families have become just as broody as recent immigrants. It is perhaps not as substantial as the mid-1960s baby boom, which produced the largest generation in the country at present – those in their mid to late forties or just turning fifty. But it is a bit of a shock to the
seem that this is one city centre housing market that does have strong foundations. But it is the baby boom that
increase of 7.2% is quite staggering.”
“A population
system, as the country has become used to low or declining birth rates in recent decades. This is all of real importance to
government, but anyone involved in the property market should also take note. A rising population does not necessarily lead to increases in house prices and sales volumes, particularly if the economy takes a nasty turn – although, unless the government can force the planning system to release more land for housing, it can certainly help. However, it is the detail that
really contains the useful nuggets of information. The fastest growing regions are London and the East of England, with the Northern regions lagging behind – implying that the housing market in the South East will
18 l September 2012 l TheNegotiator
remain more buoyant than in the rest of the country. Some of the fastest growing areas appear to be around Cambridge – perhaps the most successful UK economy after London. Other towns with similar credentials include Milton Keynes and Swindon. The one Northern city that
appears in the list is Manchester, where the population grew by 14.5 per cent over the decade – testament to the strength of that city’s revival. In fact, it is the regeneration of its city centre, and the number of new residents in flats, that has driven this statistic; bear in mind that Manchester is a small area at the heart of the wider conurbation, and the growth figures for Greater Manchester are rather less stellar. Nevertheless, it does
really opens up the big questions. For years, developers have been building smaller homes, believing that the bulk of housing demand in the future would come from single-person households. The baby boom suggests that the next raft of household projections could show a drift back to conventional families. Of more concern is the fact
that this has occurred at a time when both the housing and mortgage markets are at a low ebb. Many couples who had babies in 2008 may have been recent purchasers of small flats, and may find they lack sufficient equity to move to a more suitable home. Others may be in the rental market, unable to raise a deposit to buy a home of their own. The fate of these families is
likely to become more of a political issue over the next few years. But the likely increase in demand for family housing – and the shortage of it – is something that everyone in property needs to take account of. However, while successful
countries such as Germany and Japan fret about falling populations and low birth rates, perhaps we should not be too concerned about these figures. On the other hand, it does suggest that the government needs to do something urgently to support the delivery of more housing of all types.
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