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Property investment returns to be helped by UK’s rising population, report claims

Population growth and a strong underlying economy will support property investment in the UK, a new report from Moody’s Investor Service has claimed.

The report evaluated the future investment potential of numerous European countries, finding that investors from all over the world want to buy property in traditional safe-haven markets.

The study, titled Rising Population Will Support Housing Markets in the UK, the Netherlands and Ireland, also compared population forecasts with domestic housing markets.

Gaby Trinkaus, an Assistant Vice President and Analyst at Moody’s, commented: “In our view, the rising population in these countries combined with a housing supply shortage and robust economic growth will support house prices and therefore help reduce losses on residential mortgage loans.”

The size of the 25-35 age bracket, which makes up the core of the first-time buyer market, is anticipated to stay relatively stable in the UK, something that cannot be said with as much certainty in other European countries, where this age bracket is expected to shrink.

This stability is not only predicted to sustain demand for house purchases, it will also further strengthen the already burgeoning private rented sector (PRS) in the UK. The PRS has already risen to over 4 million households, with demand for this type of accommodation going through the roof and yields growing accordingly.

With the number of people in this key renter demographic remaining stable, investors in the UK will continue to see higher yields than those found in other countries on the Continent.

The report also believes the UK’s projected population growth of 3.2% over the next five years will boost the wider growth of the country’s economy. 

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