Immigration ‘pushes up house prices 10%’… More May migration myths?


Theresa May yesterday claimed house prices could be “10 per cent lower over a 20-year period” if net migration was cut to zero – however, the migration advisory committee’s “Analysis of the impacts of migration” report (pdf) from earlier this year suggests the impact is likely to be lower.

Theresa-May-Policy-Exchange-immigration-speechThe MAC concluded (page 81):

…the impact of non-EEA economic migration on the demand for, and thus cost of, housing in the UK is lower than the impact of an increase in the UK-born population of similar magnitude.

The report draws on LSE research commissioned by the MAC, “The impact of migration on access to housing and the housing market” (pdf).

The study mainly looked at the housing market effects of Tiers 1 and 2 migrants, which, ther report points out, within the overall context of migration represents “a small minority” – most migrants are from other EU countries (whose inward migration to the UK the government cannot cap), a group that “will have a very much stronger impact on housing markets than do Tiers 1 and 2 migrants”.

On the impact on prices, it notes (page 36):

The Reading Affordability Model (Meen et al, 2011) allows some guesstimate of the impact of Tiers 1 and 2 migration on house prices overall and suggests it would add less (probably considerably less) than 1% to prices. This increase in demand will produce some new supply but, given the very low measured price elasticities of housing supply and the slowness of response, it is likely to be in the low thousands of dwellings.

The overall outcome is therefore likely to be a limited impact on rents and rather less of an effect on prices – but resulting more in some increase in housing pressure rather than significant supply response.

Concluding (page 44):

The demand from Tier 1 and 2 households is clearly very small as compared to the demand from general household formation, which runs at between 275,000 and 290,000 per annum in the UK overall.

In addition, because of lower propensities to form household and their greater propensity to live in the private rented sector where densities are higher their impact on demand is initially disproportionately low. Over time those who remain will increase their demands in line with indigenous households with similar attributes.

So a particularly important issue for the housing market is what proportion of migrants stay in the country into the longer term. Our estimates are based on comparable groups in the past. However, future behaviour may well be very different.

In sum, the vast majority of inward migration is from within the EU (i.e. cannot be restricted); the impact on prices of poorer non-EEA migrants (the vast majority of whom will initially reside in the private rented sector) is minimal; and the impact of skilled Tier 1 and Tier 2 non-EEA migrants will add less than one per cent to house prices over the next five yearsor well under four per cent in the next 20 years.

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  • Mark Thompson

    Working class England you certainly do not represent. Champagne socialists make me sick.

  • Supernatrualsocialism

    What an inane comment, nobody is drinking champagne, or talking about socialism! This could have been written by a Liberal Democrat who drinks special brew for all you know. This is an article explaining statistics relating to the impact of immigration on house prices, do you refute its claims, or is any piece of evidence that immigration doesn’t have a negative impact just champagne socialism?

  • Newsbot9

    And your far right fanatics are also nothing to do with the working class, so your point?

  • tghrt

    Theresa May yesterday claimed house prices could be “10 per cent lower over a 20-year period” if net migration was cut to zero”

    The study and this article then goes on to talk about something else – limiting migration of some subsets. But it never argues against May’s primary claim – I’ll assume it is true.

  • jeff

    “most migrants are from other EU countries (whose inward migration to the UK the government cannot cap)”

    lie – the government can cap it – it is sovereign. it can cap it, it can leave the EU, it can renegotiate the treaties. to say it ‘cannot’ is to give up on democracy

  • Newsbot9

    Even given the figures at face value, that’s some 0.5% per year. That’s about, depending, 10-20% of the rises seen each and every year, above inflation, in rents because of the shortage of housing.

    Moreover, it’s overlooking what would need to be done to cut net migration to zero – which would include stopping foreign university students entirely, a program of expulsions and likely by that point restrictions on British people leaving the country!

    What we actually need, of course, are rent caps, a tax on unoccupied property and empty brownfield sites…and a massive campaign of Brownfield council house building!

  • Newsbot9

    That’s right, to get it all we need to do is wreck the economy. Burn it all strategies, as usual. Why do you hate Britain, foreigner?

  • marge

    Achtung Juden!! You calling me foreigner? ;)

  • jeff

    restrictions on British people leaving the country!

    why on earth would that help us reach zero net migration, dickhead?

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • he5h

    how can you call anyone a right wing fanatic? you yourself are an ultrazionist!

  • Newsbot9

    Yes, foreigner, I’m calling you a foreigner.

    Thanks for displaying both your shaky grasp of English, and your anti-Semitism. Unlike you, I’m British.

  • Newsbot9

    Because zero isn’t negative, “dickhead”. The sort of hellhole you want this country to be will drive away millions of people (both the rich and the middle class, and more would but relocation is expensive…), unless you *prevent* them leaving.

  • Newsbot9

    Except of course, I’m not an “ultra” anything, and I’m a left winger. I, unlike you, actually support the Good Friday Agreement, for instance.

    I’m simply telling truth about you, “Mark/Marge”. Thanks for the display of anti-Semitism again, and your demonstration that I evidently was being too moderate about your beliefs… (fanatic)

  • marge

    I’m English

  • mark/marge

    you want everywhere in the world to be multicultural except your beloved Israel. You want a bolt-hole to run to for when your multicultural experiment in Britain goes tits-up

  • http://twitter.com/rlpkamath Rahul Kamath

    Maybe you should read the article more carefully, you know, get past the headlines….

  • Newsbot9

    So you claim. In reality, you’ve taken an anti-British stance.

  • Newsbot9

    Complete rot. Israel is highly multi-cultural, anti-Semite. And yes, I know you want to purge the Jews from the UK, as well as destroying Israel. Same old tricks of your far right.

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