Rabensteiner, Thomas ORCID: https://orcid.org/0000-0001-9289-3579, Sangwan, Navjot and Tasciotti, Luca ORCID: https://orcid.org/0000-0003-2561-5530 (2026) Migration and housing costs: what does international evidence imply for the UK? [Working Paper]

Preview

PDF (Open Access Report) 54014 TASCIOTTI_Migration_And_Housing_Costs_(OA REPORT)_2026.pdf - Published Version Available under License Open Government License 3.0. Download (2MB) | Preview

Abstract

This report provides a systematic review of the international evidence on the relationship between immigration and housing, with the aim of informing the Migration Advisory Committee (MAC) about the impact of immigration on housing costs in the UK. It addresses three questions: (i) how large the effects of immigration on housing costs (house prices and rents) are; (ii) under what conditions these effects arise; and (iii) how relevant international evidence is for the UK context. Our contributions are threefold. First, we show that most international studies find a modest positive effect of immigration on housing costs. Most estimates suggest that a one-percentage-point increase in the immigrant share of the population results in house price increases of roughly 0–3%, with mean and median estimates below 1%. Rent effects are similar. Second, we highlight that estimated effects vary across contexts and methodologies. Housing supply responsiveness plays a key role: in dense areas or where planning constraints limit construction, immigration-driven demand shocks are more likely to raise prices. Immigrant composition also matters, with higher-income immigrants exerting stronger demand pressures than lower-income immigrants. Methodologically, studies using credible causal identification strategies tend to find positive but small effects, whereas less rigorous approaches produce more dispersed estimates. Studies using smaller geographic units (such as neighbourhoods or districts rather than larger regions) often find weaker or even negative effects, partly reflecting out-migration of native residents and the spatial redistribution of housing demand. Third, we present a comparative analysis of housing market institutions across countries to identify contexts most comparable to the UK. We show that in countries institutionally similar to the UK, such as Anglo-Saxon and Northern European countries, the estimated effects of immigration tend to be smaller. The median and mean estimates suggest that a one-percentage-point increase in the immigrant share raises house prices by 0.65% and 1%, respectively. Taken at face value, this implies that immigration can explain approximately 4-6% of the total increase in UK house prices over the last three decades. Overall, the evidence does not point to a single precise estimate of the impact of immigration on housing costs. However, the literature generally suggests positive but relatively small effects. Immigration, therefore, appears unlikely to be a dominant driver of rising housing costs in the UK. Instead, the policy focus should be on how immigration and other demand factors interact with the structural features of the UK housing system.

Item Type:	Working Paper
Uncontrolled Keywords:	migration, UK, house price
Subjects:	H Social Sciences > H Social Sciences (General)
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) > Public Services International Research Unit (PSIRU) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) > Public Services International Research Unit (PSIRU) Greenwich Business School > School of Accounting, Finance and Economics
Last Modified:	12 Aug 2026 12:03
URI:	https://gala.gre.ac.uk/id/eprint/54014

Actions (login required)

View Item

Downloads