Immigration, households and housing demand.


Last week the Office for National Statistics released a report – International migration and the changing nature of housing in England – what does the available evidence show?.

The reports main findings are:

Housing demand is influenced by a number of complex factors, including population size, household structure, age of residents and the condition of the economy, as this affects employment, interest rates and other market incentives.

England’s resident population increased by 11% between 2001 and 2015, from 49.4 million to 54.8 million; the scale and nature of this growth has varied by region.

Alongside an increase in population, there has also been a 2% increase in the number of households between 2011 and 2015, to 21.9 million households in England.

Recent migrants to the UK are more likely to live in the private rented sector; 88% of EU born residents arriving between 2014 and 2016 privately rented, compared to 29% of those arriving between 1991 and 2000, although these trends are also influenced by age, as younger people are also more likely to privately
rent.

The pattern of change and growth has differed across the three main housing tenures, with the number of households in the private rented sector more than doubling between 2001 and the year ending March 2016, from 2.1 million to 4.5 million households; this is influenced by a number of factors.

The report states: One of the many factors likely to influence changes in housing demand in England is population growth. England’ s resident population increased by 11% between 2001 (49.4 million) and 2015 (54.8 million) 1. Population change varies between regions. The following interactive maps (Figure 1) show overall population change between mid-2011 and mid-2015 alongside each component of population change. These maps show that local authorities in London have experienced some of the largest increases in population between mid-2011 and mid-2015; this growth has been driven by both international migration and natural change, which have been slightly offset by negative net internal migration. Of the 10 local authorities with the largest increases in net international migration between mid-2011 and mid-2015, only two – Oxford (South East) and Coventry (West Midlands) – were outside London. In both cities, natural change also contributed to population growth, while net internal migration slightly offset population growth.

These data show how international migration has increased the population of England and is likely to have also increased the overall demand for housing. However, it should be stressed that this relationship is indirect, because population increases contribute to housing via household formation and household size. Migrants who live together, for example, in a house share, will create a lesser housing demand than those living separately.

There was a 2% increase in the number of households 3 in England between 2011 and 2015, to 21.9 million households4. In 16% (3.4 million) of these households, the household reference person (HRP) 5 was born outside of the UK (10% non-EU and 5% EU). The number of households where the HRP was EU born increased by 21% between 2011 and 2015 (from 978,000 to 1.2 million), whereas the number of households where the HRP was non-EU born increased by 6% over the same period (from 2.1 million to 2.2 million). For comparison, the number of households where the HRP was born in the UK increased by 1% between 2011 and 2015, from 18.3 million to 18.4 million. Household projections statistics for 2014 to 20396 show that the overall number of households in England is projected to increase from 22.7 million in 2014 to 28.0 million in 2039. Net migration (as assumed in the population projections) accounts for 37% of this projected household growth.

In terms of household size, it should be noted that international migrants tend to live in larger households. In 2015, the average household size in England where the HRP was born in the UK was 2.3 residents per household. The average household size where the HRP was born outside the EU was 3.0 residents per household, which is slightly higher than that for households where the HRP was EU born (2.6 residents).

Over time,the number of UK born residents who live in accommodation that they own has remained relatively unchanged since 2001 at just over 30 million, while the number of EU and non-EU born residents who own their own home has increased the number of residents privately renting has increased since 2001 for all country of birth groups in all time periods, UK born and non-EU born residents are more likely to live in accommodation that they
own rather than rent; however, compared to 2001, EU born residents are now much more likely to live in privately rented accommodation the number of UK born residents living in social housing has decreased slightly since 2001, while the number of residents born outside the UK living in social housing has increased for both EU and non-EU born

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