House prices nationwide have bounced back since the recession and are expected to rise another 9.5% in 2014 – with rates in London increasing by over 20%.
Britain needs to build 300,000 new houses a year – more than double the current number built, a study by the Future Homes Commission found.
London alone needs 800,000 new homes by 2021 just to keep up with demand, according to London Councils.
Home Secretary Theresa May said in 2012: “More than one-third of all new housing demand in Britain is caused by immigration. And there is evidence that without the demand caused by mass immigration, house prices could be 10 per cent lower over a 20-year period.”
Foreign buyers accounted for almost three-quarters of home purchases in central London in 2012, according to a report by one property group, and more than half were snapped up by buyers from Singapore, Hong Kong, China and Malaysia. But many of these high-end homes are bought by wealthy foreign-based investors and left empty.
Labour MP Sadiq Khan said: “Londoners are being priced out of the housing market by an influx of foreign buyers, who see London property as an investment and in many cases leave properties sitting empty as ‘ghost homes’.”
But according to research by the Migration Advisory Committee, the actual impact of migrants on property prices – even in the areas with the highest concentration of migrants – is almost negligible.
The report concluded: “Even in those local housing markets where they are concentrated, such migrants are likely to account for only a small percentage of those who move house in any given year. The highest percentage is in London, where they might account for about 3.5 per cent. In the rest of England the figure is likely to be below one per cent."
“By about 2017" the researchers wrote "we estimate that there will be about 112,000 additional households in the UK as a result of migration in 2011, with similar numbers in later years unless policy changes. Their effects on housing markets are undoubtedly strongest in the markets for private rented housing in those areas where migrants cluster and indeed, estate agents confirmed that migrants were often competing for such housing not with UK tenants, but with other migrants.
“Even so, over time there will be increasing demand for owner-occupied housing, which may affect the market in certain areas of high migrant concentration.
“Equally, over time some households move into the larger housing market, reducing concentrations and pressures.”
[Source: Migration Observatory]