Housing shortages would not disappear if migration were halted tomorrow

Just as we were putting the finishing touches to the Chartered Institute of Housing’s UK Housing Review (UKHR) 2025, new population projections came out.

Over the next ten years, they projected the UK population to increase by almost five million people. Furthermore, with births and deaths expected to be in balance, as the chart from the Review shows, all of this increase results from net migration.

This peaked at 906,000 in the year ending June, 2023, but is now falling and is projected to level out at 340,000 annually.

How will this affect housing demand? As the UKHR points out, one key question is how many new households are likely to form, and we still await official projections based on recent migration figures.

But a calculation by economist Ian Mulheirn suggests that current output of new homes in England is only a little below the required level, and indeed it will be exceeded if Labour’s target of building 1.5 million homes in five years is met. In Scotland, Wales and Northern Ireland, new needs are also close to being met.

The problem, of course, is that new homes are required not only for new needs, but to address the backlog of old needs.

The UKHR points out that ‘core homelessness’ in England (which includes everyone living in insecure accommodation) has reached over 240,000 households and is rising again, after a temporary halt during the pandemic. So the longstanding projection by Glen Bramley that in England we need to build as many as 340,000 homes annually, revisited in last year’s UKHR still stands.

Another key question is what impact higher migration has on demand for social housing. This is much less easy to project, as the 2021 Census showed that – even in the case of migrants who have been here for a decade – well over half are still in the private rented sector.

In the long run, of course, migrants gain permanent residency and become eligible for social housing. However, analysis of Census figures by the Migration Observatory shows that, while 17 per cent of all households in England and Wales are non-UK born, the proportion in social housing is slightly lower, at 14 per cent. In London, where 41 per cent of households are classified as non-UK born, they occupy one-third of social housing, also lower than might be expected.

According to the 2021 Census, just seven per cent of social tenants in England and Wales had a non-UK passport. These figures give the lie to recent social media claims that (especially in London) migrants are disproportionately granted social housing tenancies.

Migrants need accommodation, but their impact on the UK’s housing system is limited

In reality, migrants who have been here for 20 years or more have slightly higher homeownership rates than the UK average. So this raises a different question – does migration push up house prices? The evidence is mixed and far from clear, and much of it comes from studies in other countries. The Economist recently concluded that the overall impact of migrants on property prices is small. In industrialised countries, the share of the population that is foreign-born rose from nine per cent in 2013 to 11 per cent in 2023. Evidence suggests that such a rise will have lifted prices by around four per cent. In fact, real house prices have risen by 39 per cent, indicating that other factors play a much bigger role.

What conclusions do we draw? Migration is known to have economic advantages, especially where migrants are skilled and in higher-paid jobs.

The UK’s population would decline without migration, and housing-related jobs like construction and social care would see even bigger labour shortages. So, yes, migrants need accommodation, but their impact on the UK’s housing system is limited. Housing shortages would not disappear if migration were halted tomorrow.

John Perry is policy advisor at the Chartered Institute of Housing