MIGRATION EXPLAINS HOUSE PRICE PERFORMANCE

[The Move Channel, 26 February 2007]: The extra demand for housing that migration and immigration cause, explain much of the regional difference in house price performance around the country, according to a new report out today. 

There is a 73% correlation between regional population growth and house price growth argues the report from Propertyfinder.com.

Regions with the highest inward migration have seen the highest house price increases, while the least popular regions have seen house prices under-perform.  Exclude the North East, an exception to the trend, and the correlation is an astonishing 94%.

The North East is the exception to the trend.  Despite having an exceptionally low growth in population, house prices have seen a significant rise over the last ten years.  This is primarily because house prices were so low ten years ago that some degree of catch up was warranted.  Even so, the region still has the lowest average house prices nationwide (£137,229).

Propertyfinder.com’s Warren Bright said: “The overall level of house prices depends largely on the wider economy.  However the relative strength of regional housing markets is very clearly due in large part to population movement.” 

“Whether it is people wanting to buy their own home to live in, or investors providing rental accommodation to newcomers, demand for housing in the most popular regions has caused prices to rise the fastest.  While these population trends continue, our research suggests that the best performing regions which have been attracting the most migrants will continue to see house prices outperform over the medium term.”

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