impact of skilled migration on access to housing and the housing market in the uk
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Impact of skilled migration on access to housing and the housing market in the UK. NORFACE Migration Conference 2013 Christine Whitehead, Ann Edge, Ian Gordon, Kath Scanlon , Tony Travers LSE London. Research question. - PowerPoint PPT PresentationTRANSCRIPT
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Impact of skilled migration on access to housing and the housing market in the UK
NORFACE Migration Conference 2013
Christine Whitehead, Ann Edge, Ian Gordon, Kath Scanlon, Tony Travers
LSE London
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Research question
• What effect does skilled migration from outside EU have on UK housing market—overall and in particular cities?
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Background• Research commissioned in 2011
by Migration Advisory Committee
• Coalition government: target to reduce net migration to the ‘tens of thousands’
• LSE London: – Urban, metropolitan and housing
research
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The Points-Based System (from 2008)
• Tier 1 visas:– Entrepreneurs (no limit)– Investors (no limit)– Exceptional talent (max 1000)
• Tier 2 visas:– Shortage occupations (minimum salary)– Resident labour market test (min salary)
• Overall limit SO + RLMT = 20,700 per annum
– Inter-company transfers• No numerical limit
• Migrants can generally remain 3 years + 2
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What the literature tells us• Migrants in all income groups
– initially form fewer households than indigenous population
– are more likely to live in the private rented sector
– consume less housing than indigenous population
• But after a decade or so the differences are small
• Migrants tend to live in cities, and to cluster
• Economic migrants from rich countries more likely to return than those from poor countries
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What do we need to know?
• How many Tier 1 and 2 migrants, and from which countries?
• How long do they stay?
• What types of household do they have?
• Where do they live?
• What is their income distribution? Do they receive employer help with housing costs?
• Does housing supply respond to this new demand (either tenure change or new construction)?
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Existing data and limitationsNumbers relatively small: in 2009 Tiers 1 & 2 migrants = about 10% of all non-EU migrants
•Census•Labour Force Survey•English Housing Survey•UKBA administrative data
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Methodology• Use Labour Force Survey to estimate
numbers of migrants, based mainly on qualifications and household types
• Use UKBA administrative data to infer residential locations
• Analysis (not modelling) of types and location of housing demand
• Qualitative interviews with estate agents and relocation agencies in relevant areas
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Quantitative findings: how many?
Main visa holders
Visa type2011/12
Staying 12+ months
Tier 1exceptional talent 580investors 119entrepreneur 142
Tier 2general (salary< £150,000) 12,006general (salary > £150,000) 580intra-company transfer 16,918TOTAL 30,346
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Dependents
Visa type2011/12
Staying 12+ months
Tier 1exceptional talent 585investors 144entrepreneur 115
Tier 2general (salary< 150,000) 56,510general (salary > 150,000) 273intra-company transfer 7,963All dependents 14,731All main visas 30,346All Tiers 1 & 2 L-T migrants 45,077
Total annual L-T migration (ONS) 586,000Tiers 1&2 as proportion of total 7.7%
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Countries of origin
Tier 2 visa holders % of total
India 55 (75% of ICTs)USA 13Australia
2 – 3% each
Canada
ChinaPhilippinesPakistan
South Africa
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How much do they earn?
Visa type Minimum incomeMedian 7/09 –
6/10Tier 1 exceptional talent None
No informationTier 1 investors From investments; no
specific minimumTier 1 entrepreneur From own business; no
specific minimumTier 2 general (salary < £150,000) £20,000
RLMT £29,000Shortage occupation
£23,000Tier 2 general (salary > £150,000)
£150,000
Tier 2 intra-company transfer (long-term)
£40,000 (o/w up to 40% from housing allowance)
£40,000
Tier 2 intra-company transfer (short-term)
£24,000 (o/w up to 30% from housing allowance)
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Where do they work?District Number
(000s)% of
national total
As % of local jobs
1 City of London 11.2 12.1% 3.1%2 Tower Hamlets LB 7.6 8.2% 3.5%3 City of Westminster 6.4 6.9% 1.0%4 Southwark LB 2.8 3.0% 1.2%5 Camden LB 2.0 2.2% 0.7%6 Hillingdon LB 1.9 2.1% 1.0%7 Islington LB 1.9 2.0% 0.9%8 Edinburgh 1.6 1.7% 0.5%9 Suffolk Coastal 1.5 1.6% 2.5%10 Milton Keynes 1.4 1.5% 0.9%11 Leeds 1.3 1.4% 0.3%12 Reading 1.2 1.3% 1.2%13 Hounslow LB 1.1 1.2% 0.8%14 Birmingham 1.1 1.2% 0.2%15 Manchester 1.1 1.2% 0.3%
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Where do they work?TTWA Number
(000s)As % of national
total
As % of employment
in area1 London 43.4 46.9% 0.8%2 Reading & Bracknell 2.9 3.1% 0.9%3 Guildford & Aldershot 2.1 2.3% 0.5%4 Ipswich 1.7 1.9% 0.9%5 Milton Keynes &
Aylesbury1.8 1.9% 0.7%
6 Edinburgh 1.6 1.8% 0.4%7 Wycombe & Slough 1.4 1.5% 0.5%8 Swindon 1.2 1.3% 0.5%9 Crawley 1.2 1.3% 0.4%10 Aberdeen 1.1 1.2% 0.4%11 Luton & Watford 1.1 1.2% 0.3%12 Cambridge 1.0 1.1% 0.4%13 Stevenage 0.8 0.9% 0.4%14 Norwich 0.9 0.9% 0.4%15 Bournemouth 0.6 0.7% 0.4%
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What kinds of households?
Household type
Country-of-origin groupsAll
England
(2008)
Rich non-EEA India
Poor non-EEA
excluding India Total
Single person 13 12 20 14 29Couple only 38 33 25 32 35
TOTAL SMALL HOUSEHOLDS 51 45 45 46 64
Parent(s) and children alone 28 37 41 36 29Couple/family and other
adults7 5 6 6
8Other multi-adult household 15 12 7 11
TOTAL LARGE HOUSEHOLDS 50 54 54 53 37
Total 100 100 100 100 100
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What kinds of housing?
Housing tenure
Country-of-origin groups
All England (2008)
Rich non-EEA India
Poor non-EEA
excluding India Total
Owner occupier 17 18 28 20 68Social renting 1 4 4 3 18Employer housing 3 6 4 5
14Other private renting 77 71 63 70Living with relative or rent free
3 1 1 1
Total 100 100 100 100 100
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How does that change over time?
Housing tenure
Years since arrival in UKAll
England
(2008)
0 1 2 3 4 5 6 Total
Owner occupier 4 8 14 25 29 42 45 20 68Social renting 1 2 5 5 3 5 5 4 18Employer housing 2 6 5 3 5 6 0 5
14Other private renting 86 82 75 67 61 46 50 70Living with relative or rent free
6 2 1 0 2 1 0 2
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Some implications
• 20% of these households do not fit the sixteen new household categories – which implies that large numbers share as multi-adult households
• Indian ICT workers—a major category—tend to be in this group
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...• Migrant households initially
consume much less housing than equivalent resident households.
• As migrants become more settled their households change character and they consume more housing and become owners
• Therefore impact depends on how long migrants stay
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How long do they stay?
Year of visa issuance
000s of households resident by year
2012 2013 2014 2015 2016 20172011/12 22.7 22.0 20.6 18.1 16.6 12.52012/13 22.7 22.0 20.6 18.1 16.62013/14 22.7 22.0 20.6 18.12014/15 22.7 22.0 20.62015/16 22.7 22.02016/17 22.7
TOTAL 22.7 44.7 65.3 83.4 100.0 112.5
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Qualitative findings• Interviews with estate agents and relocation
agents in London & Aberdeen; survey of lettings agents
• Most such migrants rent flats—key factors are travel to work time and schools
• ICT migrants generally compete with other migrants because able/willing to pay higher rents
• High-income migrants benefit from relocation packages and housing allowances
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• ‘Non-EU relocators’ made up at least 10% of clientele for all agents who responded—and in some cases over 75%.
• Most common nationalities American, Middle Eastern, and Russian
• Most looking for unfurnished houses or furnished flats
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• Clients generally planned to stay 1-2 years in the rented property
• Certain neighbourhoods seen as attractive to particular nationalities:
Chelsea, Kensington – AmericansKnightsbridge, Mayfair – Arabs
Canary Wharf – Chinese• No consensus about whether demand
from such clients affected rents—30% said yes, 70% said no.
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Conclusions• Numbers small in relation to overall
migration• Concentrations in certain areas,
especially London & SE, Ipswich, Aberdeen—but even there small % of housing markets
• Reading affordability model suggests very small impact on house prices—(much) less than 1%
• Greater effect likely to be on rents