Monday, January 25, 2016

More on Housing

In December 2012, Theresa May claimed that more than a third of all new housing demand in Britain was caused by immigration. “And there is evidence that without the demand caused by mass immigration, house prices could be 10% lower over a 20-year period.” This encourages the idea that the housing crisis is caused by mass migration and that without migration, Britain would have no need for more housing. There is a high perception among white Britons that migrants receive positive discrimination when it comes to social housing. A 2014 LSE discussion paper points out: “The level of discrimination perceived by white Britons in social housing is higher than that perceived by any other group in social housing. And the only other ethnic groups reporting higher levels of perceived discrimination with any part of the state is the black community with the police, criminal justice and immigration authorities, a relationship that we know to be very troubled.” One Daily Mail headline from 2012, read: “Revealed: How HALF of all social housing in England goes to people born abroad”. The actual figure at the time was 8.6%: it now stands at 9%. Around 91% of all new social tenancies are taken up by UK-born citizens.

But migrants aren’t jumping queues for social housing, and in some places immigration actually lowers housing demand. Migrants are more likely to rent in the private sector, as opposed to buying homes or living in social housing.

The London School of Economics report that May cited as the source for her claim also says: “In the early years even better off migrants tend to form fewer households as compared to the indigenous population; to live disproportionately in private renting; and to live at higher densities. However, the longer they stay, the more their housing consumption resembles that of similar indigenous households.”
This, in part, debunks the idea that immigration is the biggest strain on housing – new arrivals tend to live in denser households and take up less space. As the LSE report also points out, two thirds of housing demand is created not by net migration figures being higher than in previous years, but by a lack of social housing stock, an increase in life expectancy, and more households delaying marriage or forgoing cohabitation resulting in an increased number of smaller households.

According to the Oxford Migration Observatory, 74% of recent migrants (those who have been in the UK for five years or less) were in the private rented sector in the first quarter of 2015: they are twice as likely to be renters compared with the total migrant population; 39% of the total foreign-born population were in the private rented sector, and just 14% of the UK-born population.

Filipa Sá, a labour economist and academic, found that immigration actually lowers, rather than raises, house prices in some areas. In a 2014 Economic Journal article, Immigration and house prices in the UK, Sá wrote that an increase of immigrants equal to 1% of the initial local population leads to a 1.7% reduction in house prices, based on immigration data from the Labour Force Survey. Crucially, new immigration to an area may lower the average local income, and decrease both housing demand and supply: immigration often leads to an outflow of natives (white flight), leading to a lower demand for housing, Sá wrote.

Recent migrants will find it very hard to get into social housing (except for asylum seekers); have a look at your local authority set of rules for getting social housing. It is harder to get social housing if you have no connection with the area. You also have to be legally allowed to live in the country, so, there is no way to arrive and simply be given a tenancy. There are very, very few homes available. The only people that get them are desperate or in the right place at the right time (typically pensioner who has been on the housing list for a very long time - sheltered housing does have a turnover). Where immigrants must impact housing supply is in the supply within the private sector. A lot of them do claim in-work benefits which includes housing benefit. The presence of £25billion worth of housing benefit in the UK will inflate house rents for all. It's not generous but there appears to be a ready supply of immigrants in low wage jobs who are prepared to live in houses of multiple occupation that are awful dives when they first get here. Indigenous Brits are rarely prepared to put up with that.

There has been one area where immigration has been crucial in attempting to solve the housing crisis: building homes. The Chartered Institute of Building points out that any caps on immigration will harm house-building rates, as not enough British-born nationals are either trained or interested in construction careers, and migrants have been filling the gap.

House building has never kept pace with the population. It doesn't suit the developers to have too many properties on the market. Best to land grab, keep hold of said land and only build on it when they can make the maximum profits. Housing is not considered a roof over people's heads by the investment sector, but something that can be speculated upon. Many people think that the problem is buy-to-let but it is buy-to-leave-empty that is an increasing problem.

1 comment:

Mike Ballard said...

Right. The problem is lack of supply and allowing demand to increase just enough to keep prices rising. The solution to the problem is social ownership and democratic control over the collective product of labour, including housing.