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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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza