Loughborough
faces a predicament. The population is growing and the provision of new housing
isn’t keeping up. With the average age of a Loughborough person being 39.3
years (compared to the East Midlands average of 40.0 years old and the national
average of 39.4 years of age), the population of Loughborough is growing at an
alarming rate. This is due to an amalgamation of longer life expectancy, a
fairly high birth rate (compared to previous decades) and high net immigration,
all of which contribute to housing shortages and burgeoning house prices.
Durham University have kindly
produced some statistics specifically for the Charnwood Borough Council area.
Known as the UK’s leading authority for such statistics, their population projections
make some startling reading…
For
the Charnwood Borough Council area ... these are the statistics and future
forecasts
2016 population 178,255
2021 population 187,191
2026 population 196,575
2031 population 205,577
2036 population 212,306
The
normal ratio of people to property is 2 to 1 in the UK, which therefore means...
We need just over 17,000 additional new properties
to be built
in the Charnwood Borough Council area
over the next 20 years.
Whilst
focusing on population growth does not tackle the housing crisis in the short
term in Loughborough, it has a fundamental role to play in long-term housing development
and strategy in the town. The rise of Loughborough property values over the
last six years since the credit crunch are primarily a result of a lack of
properties coming onto the market, a lack of new properties being built in the town
and rising demand (especially from landlords looking to buy property to rent
them out to the growing number of people wanting to live in Loughborough but
can’t buy or rent from the Council).
Although
many are talking about the need to improve supply (i.e. the building of new
properties), the issue of accumulative demand from population growth is often overlooked.
Nationally, the proportion of 25-34 year olds who own their own home has
dropped dramatically from 66.7% in 1987 to 43.8% in 2014, whilst 78.2% of over
65s own their own home. Longer life expectancies mean houses remain in the same
hands for longer.
The
swift population growth over the last thirty years provides more competition
for the young than for mature population.
It might surprise some people that 98% of all the land in the UK is
either industrial, commercial or agricultural, with only two percent being used
for housing, which means one could propose expanding supply to meet an expanding
population by building on green belt – this is of course a rather controversial option! People mention brownfield sites, but recent
research suggests there aren’t as many sites to build on, especially in Loughborough
that could accommodate 17,000 properties in the next 20 years.
In
the short to medium term, demand for a roof over of one’s head will continue to
grow in Loughborough (and the country as a whole). In the short term, that
demand can only be met from the private rental sector (which is good news for
homeowners and landlords alike as that keeps house prices higher).
In the long term though, local and national Government
and the UK population as a whole, need to realise these additional millions of
people over the next 20 years need to live somewhere. Only once this issue
starts to get addressed, in terms of extra properties being built in a
sustainable and environmentally friendly way, can we all help create a socially
ecological prosperous future for everyone.
If you would like to discuss the Loughborough property market or chat about any potential investment please feel free to call me on 01509 260777 or email me james.loughborough@belvoir.co.uk
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