BRITAIN’S rental crisis is being driven by record net migration as the housing supply fails to keep pace with a growing population, according to new analysis.
The number of rental households formed by new immigrants has jumped from around 80,000 a year in the 2010s to over 200,000 in recent years, Capital Economics said in a note released on Monday (May 13). The analysis is based on Office for National Statistics data that suggest 80 per cent of new immigrants rent in the private sector.
The findings suggest the UK economy’s reliance on foreign workers and failure to build housing are colliding, compounding the cost-of-living crisis for tenants.
“High net migration has led to a big jump in demand for rental properties that has pushed up the cost of rent compared to the average salary,” said Andrew Wishart, senior property economist at Capital Economics.
Immigration is one of the top issues for voters ahead of an election expected later this year, with the ruling Conservatives attempting to quell discontent on the right of the party over its handling of borders.
Net migration has soared in the UK since the pandemic, hitting a record of 745,000 in 2022. It has been driven by international students, healthcare workers and migrants arriving from Hong Kong and Ukraine.
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Capital Economics said rental demand has also been boosted by aspirant homeowners having to rent for longer due to high mortgage rates. “But even if all these would-be buyers rent instead, the resulting increase in rental demand would be far smaller than that from migration.”
Wishart warned that many lower-income households were being priced out of the rental market, with social housing waiting lists and rough sleeping on the rise. BLOOMBERG
