Supply and demand are perhaps the most fundamental concepts of economics, and it is the main reason why UK house prices have increased so much in recent years, and why Britain’s growing population will almost certainly push property prices even higher in the medium- to long-term.
The latest forecast from the Office for National Statistics that predicts a 8.4 million rise in the UK’s population over the next 22 years from last year’s 65.6 million, eventually reaching 74 million in 2039, spells bad news for young people trying to get a foot and the housing ladder, and underlines the urgent need for more private rented homes.
That is why the government needs to reverse many of its recently introduced anti-landlord policies, such as the scrapping of the ‘wear and tear’ allowance, phasing out of mortgage interest relief and the 3% stamp duty surcharge.
Jonathan Stephens, managing director of Surrenden Invest, said: “Whilst it’s wonderful that we can all enjoy a longer life and a larger population can positivity impact the size and capability of those of working age, it does also increase pressures on basic requirements such as housing – namely, where will we all live?!
“Successive governments’ record of building enough homes to meet demand we know has and remains woeful with the creation of new homes, especially within the private rented sector which is growing rapidly, being funded more and more by individuals and private institutions.
“With population forecasts such as these, it would seem wise for landlord investors to be encouraged, not penalised through stamp duty reforms and tax hikes as we have seen over the past 18 months.”