Housing | Key Topics

  • Immigration is a major factor in the demand for housing. To meet overall demand it is estimated that the UK needs to build 300,000 homes a year - that is one every two minutes. (Paragraph 1)
  • In England alone, 240,000 homes will need to be built every year for the next 25 years, 45% of which will be due to migration. This means we will need to build one home every four minutes for the next 25 years just to house future migrants and their children. (Paragraph 1)
  • Official data shows that over the last ten years, 90% of the additional households created in England were headed by a person born abroad. (Paragraph 5)
  • In London all of the additional households formed in the last ten years were headed up by someone born overseas. (Paragraph 5)
  • In the short term the UK needs to build more homes. In the longer term any housing strategy must also address demand. Reducing net migration will reduce the demand for housing. (Paragraph 9)

1. The UK has a housing crisis. Put simply there are too many people chasing too few homes. In 2004 the Barker Review estimated that 240,000 additional homes needed to be built in the UK every year to cope with demand. However, in the last ten years an average of just 170,000 have been built (see here and here). The House of Lords Select Committee on Economic Affairs has now concluded that 300,000 new homes would be needed annually in the UK. In England alone, the DCLG projects that based on net migration to England of 233,000 a year (it is currently 307,000 and has averaged 223,000 in the last five years) 240,000 new homes will need to be built each year for the next 25 years to keep up with demand, 45% of which will be due to future migration. We will therefore need to build one home every four minutes to house future migrants and their children. The government has committed to building one million new homes across the UK by 2020, which the House of Lords Committee said ‘will not be enough’.

2. The UK’s housing shortage has a huge impact on people’s lives. High housing costs in many parts of the country take a large portion of their income. The English Housing Survey found that 43% of income is spent on housing costs amongst those in the private rental market. For some young people the high cost of renting means that they have to spend longer living in house shares or with their parents and some families are forced to live in overcrowded conditions or move away from their local area to find suitable accommodation that they can afford.

3. Those living in the parts of the UK with lower housing costs cannot afford to move for work leaving them trapped in areas with fewer opportunities. The social housing sector, which provides accommodation at below market rents, is overwhelmed. Very large waiting lists (1.24 million people were on the social housing waiting list in 2015 in England alone) mean that only those deemed most in need will ever get allocated a social home.

4. The demand for housing is closely related to the number of households in the UK. (A household can vary from one person living alone to a family with children or a group of unrelated people sharing a common space like a kitchen or living room.) Household formation depends on changes in the population’s age-structure, social changes including trends in cohabitation, marriage and divorce, and birth and death rates. It is also influenced by the availability and cost of housing. For much of the 20th century the number of households rose faster than the population growth and the average household size fell. However recently average household size has changed little and population growth is now the key factor driving household growth (see here).

5. One way of measuring the impact of immigration on housing is to look at the additional number of households formed that are headed by an immigrant. There is wide variation in the size of immigrant households but, on average, household size tends to be greater and they are also more likely to live in overcrowded conditions. So, person for person, immigrants have required less housing than the UK born. Official Labour Force Survey data shows that over the last ten years 90% of the additional households created in England were headed by a person born outside the UK and, in London in the last ten years, all of the additional households have been headed up by someone born overseas.

6. That is not to imply that most newly built housing is occupied by immigrants. Many immigrant households move into existing urban areas. Others, the majority of new immigrants to the UK, live in the private rented sector and that sector has grown as the immigrant population has grown. Over time the pattern of accommodation has changed and immigrants who have been in the UK for a long time are likely to have similar levels of home ownership to the UK born.

7. There is a long standing controversy over the granting of social housing to immigrants. This has not been helped by local authorities’ reluctance to publish the relevant information. Some immigrant groups have very low use of social housing whereas others are more likely to be in social housing than the UK born. There is absolutely nothing in the rules that states that immigrants should get preferential treatment and, in fact, the 2011 Localism Act allows Local Authorities to bar applicants from joining the waiting list if they cannot demonstrate a local connection, such as living in the area for at least two years. However, priority for social housing is largely determined by need so some ‘high need’ immigrant families will gain access to housing over longer standing local residents deemed to be of lower need. This can be contentious.

8. Nowhere is the housing crisis more apparent than London. Its population has grown by over one million in the past decade and now stands at 8.67 million, its highest level ever. It is projected to keep growing to over 10 million by 2030. This growth is entirely down to immigration (see here). Despite being presented as a success story, London loses more people each year to elsewhere in the UK than any other region of the country. The number of households headed by person born in the UK has actually fallen since 2000 (see here). Waiting lists for social housing in the capital almost doubled between 2000 and 2012 but have since fallen due to the 2011 Localism Act. Meanwhile around half of all social housing in the capital is now headed by someone who was foreign born.

9. In the short term the UK needs to build more homes. In the future, any housing strategy must address both supply and demand. Immigration is a major part of housing demand. Unless net migration is reduced to a manageable and sustainable level a large house building programme will have to continue indefinitely, with all the costs and loss of amenities involved.

Updated November 2016

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