Debunking the myths about migrants and housing

The more politicians and the media discuss migration, the more myths are created. The prime minister produced one himself when he announced a new white paper on May 12. He said that most migrants are low-paid, when the evidence shows that many earn above-average salaries.

“Growth is the number one priority” for the government, Mr Starmer has said previously, but if he achieves his aim of cutting migration by 100,000 annually it will damage the economy, not help it.

Professor Jonathan Portes points out that the average migrant contributes more to the economy than the average Brit. Cutting migration by 100,000 annually would, for example, increase the budget deficit by some £7 billion.

Migrants are also key to important sectors of the economy. In construction work – vital to the government’s target of building 1.5 million homes – they fill about 14 per cent of jobs. In adult social care, where there is a shortage of workers, they make up one in five of the workforce. Some 400,000 more care workers will be needed over the next decade. Closing off these jobs to foreigners, as the government plans to do, will only worsen the crisis.

Migrants fill jobs – and not just low-paid ones – because most of them are of working age. This is at a time when, without migration, Britain’s population would stay the same or, in Scotland’s case, fall. Migrants help to balance the population and fund the welfare system – if net migration fell to zero compared with projected levels, the “dependency rate” of old people on younger ones (to pay for care, pensions, etc.) would increase twice as fast as is currently happening.

Net migration fell to 431,000 in 2024, about half its level in 2023. It is projected to fall further to around 340,000 annually. While this does add to housing demand, the effect is complex and difficult to quantify. This doesn’t stop the government’s white paper from mentioning the pressure migration puts on the housing market no less than five times. It’s therefore important to look at the facts. 

Most migrants have ‘no recourse to public funds’- they can’t receive benefits or get housing help

First, practically all EU migrants and over two-thirds of those from outside the EU come here on work or study visas. Some, like hospitality or farm workers, may be housed by employers; students may be in university accommodation. This means that the impact on housing is limited, often short-term and very difficult to predict.

Second, the impact of other categories of migrant is also not as big as it might seem. For example, asylum seekers cannot access council housing and many of those accommodated by the Home Office are in hotels. Many Ukrainian refugee families are using spare bedrooms in people’s homes, via hosting schemes. Of course, longer-term, people accepted as refugees need housing or may become homeless, but a large proportion are single people and (for example) are unlikely to get social housing.

Third, other new migrants are only eligible for social housing in very limited circumstances (e.g. a spouse made homeless by domestic abuse).

Most migrants have ‘no recourse to public funds’- they can’t receive benefits or get housing help and therefore rent privately. In any case, most councils have ‘local connection’ rules which favour longstanding residents in their allocations policies, rather than newcomers. So migrants generally have much less ‘right’ to a social home than people born in the UK and often have far less chance of getting one even if they eventually become eligible. That’s why census data show that in 2021 just seven per cent of people living in social housing had a non-UK passport.

Fourth, the effect of population growth on housing demand depends on the economy – separate households only form when they can afford to, otherwise people share or live with parents. 

The gap between housing supply and demand is so big that even if migration stopped completely, new house building would still fall well short of what’s required

Practically all recent migrants rent privately and many will be unable to buy a home or will do so only after several years. This is why, though there is some evidence that migration puts up house prices, the effect is far from clear.

Finally, we must emphasise that the housing crisis is due to a lack of new affordable homes being built and a lack of investment in housing over many years. It can’t be blamed on immigration. The gap between housing supply and demand is so big that even if migration stopped completely, new house building would still fall well short of what’s required. The white paper implies that having fewer immigrants means less pressure on the housing market. This may be true, but it won’t make much of a dent on the 340,000 we still need to build annually (in England) to meet demands that already exist.

Cutting migration won’t solve the housing crisis, and by damaging the economy and depriving it of key workers it might make it worse.

John Perry, policy advisor, Chartered Institute of Housing