Immigration and House Prices under Various Regional Economic Structures in England and Wales

Abstract: http://journals.sagepub.com/doi/full/10.1177/0042098018777420#abstract

UK immigration has risen substantially over the last two decades: data from the quarterly labour force survey show that the total number of immigrants has doubled from just below 10% of the UK total population to around 20% between 2001 and 2017. Despite the new arrivals entering the country every year, many have established themselves in the UK for generations by progressing through their careers, forming families and having children growing up alongside other children from local households. The research in this article attempts to explore the housing practices of immigrants in England and Wales in different types of local economy with a view to identifying areas in which housing (economic) deprivation is potentially being experienced by these households. The types of areas are characterised by employment density and average socioeconomic profiles of workers. While immigrants usually concentrate in places where most jobs are offered, places with larger businesses and employees of higher average occupational skills tend to see more affluent immigrants. By contrast, places with lower average occupational skills of employees tend to see a greater incidence of deprived immigrants.

The findings suggest that in places where jobs require generally lower skillsets, slower house price growth results from inflows of immigrants. The higher rate of free renting by these immigrants is the main probable reason for depreciating house values in those areas. Free renters are less likely to participate in the housing market themselves, and an increase in the rate of this form of tenure (i.e. a higher share of deprived immigrant households) could lead to a lower degree of mobility overall for these households. This, in turn, leads to lower levels of housing stock turnover and transactions related renovation. As a result, both housing quality and prices fall.

This article provides some evidence about economic inequality through housing market channels. Although the evidence is volatile over alternative time periods, it highlights some of the concerns over immigrant households’ lives in general, and shows that they should not be treated as a homogenous group. The topic is important as it directly taps into the dynamics of immigrant population flows around the country. It examines how immigrants survive, progress and make decisions between being assimilated and staying close to their own co-ethnic communities, as well as making trade-offs between economic progress and attachment of place.

Read the paper on Urban Studies - OnlineFirst here