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Demographic Trends and Property Investment

Peter Hemple reports

Data released in September this year, by the Office for National Statistics (ONS), revealed that the number of households in England is set to increase by 17% over the next 25 years. This equates to the 22.9m households in 2016 rising to 26.9m in 2041, an increase of 4m households, or 159,000 new households a year.

However, this estimate is significantly (51,000 households per year) lower than the 210,000 new households per year that was projected by the ONS just four years earlier, in 2014. The ONS defines households as either one person living alone, or a group of people living at the same address who share cooking facilities and a living room.

All regions in England are expected to grow, with London hosting the highest jump at 24%, from 3.4m to 4.3m households – necessitating the development of 845,000 new homes. The North East projection is the lowest for new households, with a rise of 8% being less than half the national average.

Another significant number is the 54% growth expected in households headed by somebody aged 65 years and over, while those headed by somebody under 65 will increase by a relatively paltry 3%. In other words, the majority of growth in new households will be pensioners, or almost pensioners, which is expected to create a surge in demand for housing within retirement communities.
Perhaps the most eye-catching projection is for households headed by somebody 85 and over, which may increase by 111%, and that will create a massive increase in demand for care homes.

One-person households set to increase by almost 2m
The ONS released a second instalment of its household projections in December, which revealed that around half of all new household demand growth in England will be for one-person households, which will increase by 26% between 2016 and 2041. Specifically, the data showed that there were 7m households of this type in 2016, with a projection of this number increasing to 8.9m in 25 years’ time.

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