Thursday, November 21, 2024

Record immigration behind a third of rent rises

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There are 4.9 million privately rented households in the country, meaning immigration between mid-2021 and mid-2023 increased demand by nearly 9pc.

Demand in the rental sector has also climbed because high mortgage rates have locked first-time buyers out of the housing ladder, but this has been a much smaller factor than immigration, Mr Wishart said.

In 2023, first-time buyer numbers fell by around 40,000 year-on-year, meaning these people may have ended up renting for longer than normal.

Ben Brindle, researcher at the Migration Observatory, said: “It just comes back to supply and demand. If you have population growth and the housing stock is not growing as fast, that puts pressure on rents.

“Migrant homeownership rates tend to be lower, so in terms of where their demand on housing is, it is in the rental sector.”

At least 80pc of new arrivals renting for at least the first few years after they move to the UK, according to previous analysis by the ONS.

The impact is most intense in major cities. London has recorded the steepest rent growth of any part of the UK, according to Zoopla.

A report by the Centre for Policy Studies (CPS) think tank earlier this month warned that “immigration is severely exacerbating the housing crisis” because supply has not kept pace with demand.

Government housing targets to build 300,000 homes a year in England include an assumption that net immigration to England of 170,500 people per year will bring additional demand for 72,250 new homes.

These figures are far smaller than the actual numbers and yet the 300,000 per year target has still never been met, the report warned.

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