Nationwide warns that Brexit could cut demand for rental units

The Nationwide has set out a comprehensive study of how migrstion impacts on housing demand in the UK, especially in the private rental sector.

It says that between 2011 and 2016 there was an estimated 1.5m increase in the resident population privately renting, of which 0.6m was due to migration – three quarters of whom were born in the EU.

It says some 88 per cent of EU-born residents and 80 per cent of non-EU born residents arriving between 2014 and 2015 rented privately.

“Migrant tenure trends are influenced by the length of stay in the UK and age (older residents are more likely to own their homes). The longer that migrants are in the UK, the more tenure patterns tend to resemble the UK born average” explains the Nationwide’s chief economist, Robert Gardner.

“For example, while the vast majority of recent arrivals are renters, those who migrated to the UK before 2001 are more likely to be owner occupiers than renters, and those who migrated before 1990 have a slightly higher owner occupier proportion than UK born average” he adds.

The Nationwide says there is a significant regional dynamic with migrants accounting for a much higher proportion of the private renting population in London than elsewhere in England. The capital has absorbed around one third of the increase in the EU-born population that rents privately in the last five years.

Of London’s private renting population 60 per cent were born outside of the UK (26 per cent in the EU and 34 per cent outside of the EU), compared with less than 20 per cent in the regions of the North East, North West and Yorkshire & Humberside.

There are around 1.6m EU-born renters in England (of which 1.0m are in London, the South East and East regions).

“With the ongoing uncertainty around Brexit and the rights of EU citizens once the UK leaves the EU, we may see a slowing in housing demand (and particularly rental demand) in the years ahead, if it results in slower migrant flows. Recent data points to a significant slowing, though the data can be volatile” says Gardner.


Written by: Houseladder