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Data behind Dominic Raab claim migration pushed up house prices

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Author: BBC NEWS (bbc.com)

The government has published the data behind Housing Minister Dominic Raab’s claim that immigration has caused house prices to rise 20% over 25 years.

His figures were based on a model detailed in reports published in 2007 and 2008 by the National Housing and Planning Advice Unit.

The model suggested that from 1991-2016, rising immigration contributed to a 21% rise in house prices.

Labour urged Mr Raab to stop blaming others for “unaffordable” housing.

In an interview with the Sunday Times, Mr Raab said he planned to write to the Migration Advisory Committee (MAC) urging it to consider the negative effects of new arrivals on housing demand as well as the positive economic benefits of immigration.

He said he had been told by civil servants that immigration had a sizeable impact on house prices, citing figures from the Office of National Statistics (ONS) from 1991 to 2016.

“Based on the ONS data, the advice to me from the department is that in the last 25 years we have seen immigration put house prices up by something like 20%,” he said.

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Analysis by Reality Check

Have house prices increased by 20% as a result of immigration? They might have done, but there is a strong argument that the housing market is too complicated to assign price changes to particular factors.

The government’s report outlining this figure is littered with warnings about how we should not expect its conclusions to match what has really happened because it is just a theoretical model.

We should also be cautious of a 10-year-old model, especially given the unprecedented decade of low interest rates we’ve had since then.

It is reasonable to expect an increase in households nationally to increase the demand for housing, but assigning precise-looking figures to that overlooks the complexity of the market.

His comments prompted the Office for Statistics Regulation to call on the Ministry of Housing, Communities and Local Government (MHCLG) to release the analysis publicly.

On Friday, the ministry revealed that Mr Raab’s figures were based on a model that suggested rising immigration has also contributed to an increase of £11,000 for the average property.

But the same document suggested immigration was a less significant factor in rising house prices than higher average earnings (responsible for 150% growth in house prices) and total population growth, which includes immigration (+32%).

But John Healey, Labour’s shadow housing secretary, said immigration was “not the major driver of rising housing prices”.

He added: “Rather than try to blame others for unaffordable housing costs, Dominic Raab should look at the decisions Conservative ministers have made since 2010.

“Deep cuts to housing investment have halved the number of new low-cost homes for first-time buyers and driven the number of new social rented homes being built to a record low.”


Source: http://www.bbc.com/news/uk-politics-43753564

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