UK House Prices to Rise As Population Grows

It might seem like an obvious comment, but that doesn’t make it any less important. Britain’s growing population will push house prices higher and higher. No cyclical boom and bust, just onwards and upwards.

The observation was made by the analytical arm of the credit ratings agency Moody’s and explains why, along with the limited capacity for private housebuilding, an investment in housing will remain the preferred option of every UK household.

The starting point is the forecast from the Office for National Statistics that predicted a 4.4 million rise in the UK’s population in the next decade from last year’s 64.6 million, eventually reaching 70 million in 2027.

Moody’s Investors Service is interested in the subject from the narrow view of clients that buy and sell mortgage-backed securities. These bundles of mortgages, which lost so much of their credibility in the financial crash when many were found to contain sub-prime loans, are big money spinners for the banks again, and nowhere more so than in the UK.

via The Guardian

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