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House Building Deficit of 1.2 million Continues to Drive Demand for Property

Due to an increasingly ageing population, the UK has carried a house building deficit of 1.2 million since 2004 – a factor that will continue to drive demand in the housing market.

Due to an increasingly ageing population, the UK has carried a house building deficit of 1.2 million since 2004 – a factor that will continue to drive demand in the housing market.

Based on central population projections, the UK will have grown by an average of 210,000 households per year over the period from 2014 to 2039.


However, analysis from the Yorkshire Building Society show that the number of homes constructed since 2004 have stood well-below the government’s target of building a minimum of 200,000 homes per year.


With a similar shortage of homes, the building society estimates that 1.5 million additional homes need to be built in order to reduce house price inflation.


Based on these projections, a rapidly ageing population will continue to drive the growth in households and, as a consequence, a growth in housing demand.


"The Brexit decision and the uncertainty it creates around the prospects for private sector house builders, not to mention the country's economic outlook, is likely to heighten the housing crisis," said Andrew McPhillips, chief economist at Yorkshire Building Society.


"Addressing the shortage of homes must remain high on the government's agenda regardless of the work required following the EU vote. The longer we leave the supply crisis to worsen, the more difficult it will be to resolve.


"The UK has failed to build the number of homes needed to meet demand year after year, which has consequently inflated prices and made it even more difficult for those looking to buy."


As the population continues to age at an exponential rate, exacerbating the current supply and demand imbalance, and as further affordability barriers withhold more and more people from entering the UK’s property market – the UK’s private rented sector is set to continue benefitting from a surge in demand.

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