Internal migration drives house price growth

03 January 2007
House prices in the south-west of England are held up by demand as the region experienced the largest net population gain of anywhere in the UK in the last decade, new research from the Halifax suggests.

The region has welcomed 1.4 million people, giving it a net population gain of almost a third of a million people.

The south-east has also seen a net influx while the West Midlands, Northern Ireland and the north-east have suffered net population drain.

The south-east experienced the highest level of internal immigration, with 2.25 million arrivals from elsewhere in the UK between 1996 and 2005.

As many as ten per cent of Londoners (2.4 million people) fled the capital, however, although the London population, factoring in international migration and the birth rate, rose at a higher rate than that of any other region – which helps account for astronomic house price growth, at 218 per cent over the last decade.

A Nationwide house price survey last week revealed double-digit inflation in prices across the UK in 2006 at 10.5 per cent was led by London, with demand exceeding supply and contributing to what the bank's chief economist Fionnuala Earley called "worsening affordability".

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