Population slump hitting house prices
Posted: 19 Jun 2006 08:50:21 GMT
Low fertility rates in Scotland are likely to hamper the property market in the years to come, according to a new report.
A study carried out by economists from the universities of Strathclyde, Stirling and Glasgow suggests that recent property price increases will be reversed unless Scotland's population decline is kept in check.
As reported by the Scotsman, house prices in some areas of Scotland have increased by as much as 25 per cent within the last year.
But if current trends are continued, house prices will rise by ten per cent more in England than in Scotland over the next two decades, the economists claim.
The paper, titled Demographic Change and the Housing Market, states: "Scotland faces highly predictable and irreversible demographic change. The Scottish population is ageing, with the number of people aged 65 plus expected to rise from about 800,000 to 1.25 million in 2035."
Meanwhile, with Scotland's fertility rate currently exceptionally low, the Scottish population of those between the ages of 20 and 64 is set to fall from around three million last year to 2.5 million in 2035.
This, it is claimed, will significantly reduce the number of first-time buyers in Scotland as well as the number of first-time movers.
On the other hand, Robert Wright, from Strathclyde University, has indicated that if house prices do remain considerably lower in Scotland than in England, it is inevitable that more people will be drawn to live there.