What Does a Growing Population Mean for the UK Property Market?

Britain is still getting bigger, although the pace of growth is slowing.

The latest population projections from the Office for National Statistics put the UK population at 69.3 million in mid-2024, with the total expected to reach around 71 million by 2034. Sky News reported that the increase will be driven entirely by net migration, as deaths are projected to outnumber births over the same period.

For the housing market, that raises a fairly simple question: where are those additional people going to live?

The answer is unlikely to be evenly distributed. Population growth tends to follow jobs, universities, transport links and established centres of economic activity. That helps explain why regional cities have become increasingly prominent in discussions around housing demand.

Research published by the Guardian in July found that graduates and younger workers are increasingly weighing housing costs alongside career prospects when deciding where to live. Its analysis of the UK's most attractive “starter cities” considered affordability, employment, population growth and rental costs, with Stoke-on-Trent and Liverpool both appearing in the top 10.

That shift matters because housing demand is ultimately about people, rather than headlines about house prices.

A city with a growing population but limited housing supply can experience sustained pressure on rents. A place where employment is expanding at the same time may attract new residents who are more likely to rent before buying. And when transport improvements make commuting between neighbouring cities easier, the housing market can begin to spread beyond the most expensive core areas.

The North is particularly interesting in that respect.

The government announced a potential £45bn programme of rail investment in northern England earlier this year, including plans for a new Liverpool-Manchester connection via Manchester Airport. Reuters reported that the programme is intended to address long-standing transport constraints and improve links between some of England's largest metropolitan areas.

Infrastructure does not automatically translate into higher property prices, and major projects can take years to arrive. But better connectivity can change how people think about where they can live and work. That makes transport, employment and housing supply useful things to watch alongside demographic statistics.

There is also another demographic change happening beneath the headline population figures. The ONS projections reported by Sky News suggest the number of people of pensionable age will rise by 1.8 million between 2024 and 2034, while the number of under-16s is projected to fall by 1.6 million.

So population growth does not mean demand for one particular type of home will rise everywhere.

An ageing population may increase demand for different forms of housing and accessible neighbourhoods. Continued migration may support demand for rental accommodation in cities and employment centres. Smaller households can create additional demand even where total population growth is relatively modest.

For property investors, that makes demographics a useful starting point rather than a prediction.

The most interesting markets are likely to be those where population trends overlap with employment growth, infrastructure investment and a shortage of suitable housing. Those factors together give a much clearer picture of why demand might persist than a population figure on its own.

Did You Know?
The UK's population is projected to reach 71 million by 2034, but the ONS expects it to peak at around 72.5 million in 2054 before beginning to decline.

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