Has the London Property Market changed due to EU Migration? · 27/11/2023
The argument of migration and what it does, or doesn’t do, for the country’s economic wellbeing is something that has been hotly contested over the last few years.
In my article today, as a leading letting agent in London I want to talk about what it has done for the London Property Market.
Before we look at London though, let us look at some interesting figures for the country as a whole. Our London property agents have monitored national trends for some time now.
Between 2001 and 2011, 971,144 EU citizens came to the UK to live and of those, 171,164 of them (17.68%) have bought their own home.
It might surprise people that only 5.07% of EU migrants managed to secure a council house.
However, 676,091 (69.62%) of them went into the private rental sector. Our letting agents in London work with a huge variety of private tenants in rented properties in London.
This increase in population from the EU has, no doubt, added great stress to the UK housing market. Our London letting agencies have seen a considerable increase in property demand.
Looking at the figures, the housing market as a whole is undoubtedly affected by migration but it has been the private rented housing sector, especially in those areas where migrants come together, that are affected the most. London remains a high-demand area to rent in.
Indeed, our letting agents in London have seen that many EU migrants often compete for such housing not with UK tenants but with other EU migrants.
In 2001, 3.68 million people rented a property from a private property landlord in the UK.
Just 10 years later in 2011, whilst EU migration added an additional 676,091 people renting a property from a property landlord, there were actually an additional 4.14 million people who became rented property tenants and were not EU migrants, but predominately British.
As a buy-to-let landlord in London, it’s really important to gauge the potential demand for your rental property – especially if you are a property investment landlord who buys property in areas popular with the Eastern European EU migrants – including London.
To gauge the level of EU migration (and thus demand), one of the best ways to calculate the growth of migrants is to calculate the number of people who ask for a National Insurance number – which EU members are able to obtain.
Our letting agents in London have seen migration rise over the last few years.
For example, in 2005 there were 5,066 migrant national Insurance cards (NIC) issued and the year after in 2006, 5,820 NIC cards were issued.
However, in 2014, this had increased to 8,217 NIC’s. Our property management services in London cater for all types of private landlords and rented property tenants across the city.
However, if the pattern of other migrations since World War Two continues, over time there will be an increasing demand for owner-occupied property – which may affect the market in certain areas of high migrant concentration. Our letting agencies in London advise on this.
On the other hand, over time some households move into the larger housing market, reducing concentrations and pressures.
In essence, migration has affected the London Property Market: it couldn’t fail to, because of the additional 55,317 working age migrants that have moved into the London area since 2005. Our property agency in London has seen this increase in demand for rented properties.
However, it has not been the main influence on the market.
Property values in London today are 35.26% higher than they were in 2005. According to the Office of National Statistics, rents for tenants in the South West have only grown on average by 0.96% a year since 2005.
As a letting agent in London, I would say if it wasn’t for the migrants, we would be in a far worse position when it came to the London Property Market. But why, you might ask?
This was backed up by the-then-Home Secretary Theresa May back in 2012.
More than a third of all new housing demand in Britain is caused by inward migration and there is evidence that without the demand caused by such immigration, house prices would be 10% lower over a 20-year period. Our London property agents have seen this trend.
If you want to know more about the London Property Market, and for more articles like this, please visit my London Property Blog.