Weak Demographic Demand

In some areas the biggest issue isn’t a lack of housing (new build or existing) but too much relative to demographic demand. The UK’s population has grown by 18% over the last 30 year but, as the chart below shows, some regions have seen much stronger population growth while others have seen limited growth. Understanding how and why the local population is changing is essential to understanding local housing availability issues.

Weak demographic demand can be closely linked to weak economic demand where a lack of local employment opportunities forces people to move elsewhere. However, this is not always the case and it’s sometimes difficult to isolate the causes. To understand weak demographic demand, you need to build a full picture of the underlying demographic trends including the stock and flow of population change.

ONS data is very useful for understanding demographic trends including natural change and migration by age. For example, it shows London has consistently seen a net outflow of people to the rest of the UK since at least the 1970s and probably since the 1940s. Despite this, London has still seen very high population growth over the last thirty years thanks to international migrants and a high birth rate (as the chart above shows). It appears that weak demographic demand has not been a problem for most of London since the early 1980s.

Another example of the need to look closely at underlying trends in demographics when assessing weak demand can be found in areas that have rapidly ageing populations. This ageing could reflect weak demand as young people move away for work or study and leave behind an older population. However, an ageing population could also reflect wealthier older people move into the area, for example in coastal and rural retirement hotspots as per the chart below. Unfortunately, the ONS data does not include any indicators for wealth, income, or housing tenure of recent movers.

Areas with weak economic demand highlight the need to understand housing at a local level. It also highlights that fixing local housing issues can be more than just about housing.