Half a million homes a year needed to meet record net migration, says think tank

The UK needs to build more than 500,000 homes each year to meet increased demand related to growing net migration rates, according to right-leaning thinktank the Centre for Policy Studies (CPS). 

New figures released on Friday by the Office for National Statistics (ONS) revealed that net migration figures reached a record 745,000 in 2022 – roughly three times the annual average in the 2010s. 

The government’s 300,000-home-a-year national housebuilding target for England is based on a 2016 analysis that assumed net migration would run at about 170,500 per year, with around 72,250 new migrant households formed every year. 

Using the government’s methodology, the CPS have calculated that an appropriate target for housebuilding in 2022 would therefore have been 515,000, which is roughly 73% higher than the official target. 

By comparison, there were only around 177,810 new builds completed in England last year. 

The thinktank said pressures on housing were particularly strong in London and the South East, which, due to the concentration of universities, are attracting a greater proportion migration but without a concomitant increase in housing supply. 

The CPS urged an increase in housebuilding matched with efforts to reduce net migration and welcomed the government’s decision to tighten rules on student dependants. 

It also suggested other ways to reduce net migration, including reforms to the shortage occupation list – though such a move could complicate efforts to increase housebuilding. 

Foreign workers who are employed in sectors covered by the list are granted relaxed visa rules, allowing the UK to use immigration to plug labour shortages. 

Bricklayers, roofers and joiners were all added to the list by the government in July, which was welcomed by the building industry as “vital” and “overdue”, despite an outcry from backbench Conservative MPs. 

Not all experts expect the high rates of net migration recorded in 2022 to be sustained. 

According to the Migration Observatory at the University of Oxford, net migration has been “unusually high” in the past two years but could drop precipitously in the coming years. 

Researchers at the observatory say high immigration typically leads to high emigration, but typically with a lag of two to three years. 

In its baseline scenario, it anticipates a fall in net migration to around 300,000 by 2030, roughly equivalent to pre-Brexit levels. 

However, it said there were a “wide range of plausible scenarios” depending on how long migrants choose to stay in the UK.