What does Brexit mean for migration and housing demand?
The short answer to this question is we don’t yet know and it will be a while before we do, says CIH policy adviser John Perry. The longer one is that it depends very much on the kind of 'Brexit' we eventually adopt…
Migration accounts for a bit more than a third of expected future household growth in England. And ‘net’ migration from the EU (those coming in minus those going out) is about half the total in any one year. So in theory, zero net migration from the EU would mean that in the future, housing demand would fall by about one fifth.
However, we are building only half the new homes we need to keep up with demand, so any fall in numbers would have to be quite a bit bigger than this before it made much difference. And, in addition, there are various reasons why EU migration might not fall to zero anyway, which is where the kind of Brexit we adopt is very relevant.
Freedom of movement
Contrary to what many people think, ‘freedom of movement’ is not defined by membership of the EU, but by our membership of the slightly bigger European Economic Area (EEA). A ‘soft’ Brexit might involve leaving the EU but staying in the EEA, so as to benefit from Europe’s free trade rules. The problem is that this would almost certainly lead to us having to keep EEA migration rules, too, which could leave the potential for European migration and rules about whether migrants are eligible for benefits and for housing more or less as they are now.
How could this be squared with public demands for more immigration controls? At the moment it’s difficult to see, but one possibility that is being discussed is some sort of ‘emergency brake’ on EEA migration, perhaps limiting it for a certain time to people in various skilled trades. It’s unclear whether this is feasible given opposition from several EU states. It’s also unclear whether it would meet business demands, since many EU migrants are needed for less skilled but highly flexible jobs, like picking lettuces for supermarkets. And even an emergency brake might only apply for a short time, such as seven years. After that, full EEA migration rules might be restored.
If Britain isn’t in the EEA, and really does break collective trade links with Europe, it is going to be very difficult indeed to work out what future migration levels might be, not least because a possible economic downturn might reduce migration anyway. After all, England is unique in the British Isles in the extent to which migration affects population growth. A declining England might suddenly be much less attractive to people from overseas wanting work. Then UK migration levels might depend much more on the extent to which people still wanted to come here for family reasons or to study, or manage to enter to seek asylum. Scotland, of course, might at some stage break away, and pursue its own more open immigration policies, as it has long wanted to do (but has been held back by Whitehall).
The impact on housing
How might the different outcomes affect housing? CIH’s new 'What you need to know' guide looks at this in more detail, but it must be borne in mind that recent migrants are overwhelmingly accommodated in the private rented sector. Only later do some migrants (including EU migrants) manage to establish themselves, apply for and be allocated social housing. They take up only a tiny proportion (about four per cent) of new lettings each year. So the impact on waiting lists will, for several years at least, be barely noticeable except in those areas where EU migration has been very concentrated.
Of course, a big factor here is not what actually happens but what people think is happening. For example, if neighbours see ‘migrants’ moving into a ‘council house’, they may not know that it’s been sold through right to buy and is now owned by a private landlord. As we have seen since the referendum, racial intolerance seems to have increased, and even affects people who were born here, or have the same entitlements as any other long-standing resident, but ‘look like’ migrants.
The reality is that a housing shortage is going to be blamed on someone, and migrants can be useful scapegoats. It’s worth bearing in mind the conclusions of a recent JRF summary of the research on the effects of migration on poverty in the UK. On housing, it reported that the chances of a UK resident getting a social housing allocation have indeed declined, but that two-thirds of the explanation for this is that the stock of social housing has got smaller; only one-third is because of changes in migration or in eligibility rules. But blaming migrants is a lot easier than accepting that successive governments have failed to invest in sufficient housing.
Find out more
- Free publication: What you need to know about Brexit and how it might affect migration
- Webinar: Post-Brexit - what does this mean for VAT?
- Training: Benefits for EEA nationals (14 September, Coventry / 30 November, London)