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, I want to talk about what it has
done for the Hampstead Property market.
Before we look at Hampstead though, let us look at some
interesting figures for the country as a whole. 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. This increase
in population from the EU has, no doubt, added great stress to the UK housing
market.
See the pie chart
below that illustrates the proportion of the various housing tenures
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 is affected the
most. Indeed, I 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 rented a property from a landlord in the UK. Ten years later in 2011, whilst EU migration
added an additional 676,091 people renting a property from a landlord, there
were actually an additional 4.35 million people who became tenants and were not
EU migrants, but predominately British!
As a landlord, it is really important to gauge the potential
demand for your rental property, especially if you are a landlord who buys
property in areas popular with the Eastern European EU migrants. 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).
In the Borough of Camden, migration has risen over the last
few years. For example, in 2005 there were 7,578 migrant national Insurance
cards (NIC) issued and the year after in 2006, 7,421 NIC cards were issued.
However, in 2016, this had increased to 9,885 NIC’s. However, if the pattern of
other migrations since the second world
war 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. On the other hand, over time some households move into the
larger housing market, reducing concentrations and pressures.
In essence, migration has affected the Hampstead property
market; it couldn’t fail to because of the 15.3% increase in the foreign born
population share between 2001 and 2011 in the Borough of Camden. However, it
has not been the main influence on the market. Property values in Hampstead
were 90% higher in the same period. According to the Office of National
Statistics, rents for tenants in London have only grown on average by 1.37% a year
since.... I would say if it wasn’t for the migrants, we would be in a far worse
position when it came to the Hampstead property market. 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.
See the below graph that illustrates the
correlation.
If you want to know more about the Hampstead property
market, then for more articles like this, please visit the Hampstead Property
Blog www.NW3propertyblog.com or you can write to me chris@ashmoreresidential.com
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me on chris@ashmoreresidential.com or give me a call on 020 7435 0420. Pop in for a chat – we are based on Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. The kettle is always on.
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