UK rental prices dramatically rising due to record levels of immigration, new analysis says
Record levels of immigration have significantly contributed to a sharp rise in UK rental prices since the COVID-19 pandemic, with new analysis indicating that immigration accounts for a third of the rent increases observed, The Telegraph reported.
In the two years leading up to June 2023, immigration resulted in an additional 430,000 households seeking homes in the private rental sector, pushing rents 11% higher than they would have been otherwise, according to Capital Economics.
This surge in demand has driven a 30% increase in rents between mid-2021 and early 2024, far outstripping the 17% rise in wages over the same period.
According to experts from Capital Economics, the usual relationship between pay and rent has been significantly disrupted, attributing the majority of this deviation to higher net migration.
Official data underscores this impact, revealing unprecedented net immigration figures: 467,000 in 2021, 745,000 in 2022, and 672,000 in the 12 months to June 2023. These numbers starkly contrast with the pre-pandemic net immigration figure of 184,000 in 2019.
The resulting pressure on the rental market has been compounded by the high cost of mortgages, which has deterred first-time buyers from purchasing homes, thereby increasing the demand for rental properties. In 2023, first-time buyer numbers dropped by around 40,000, further fueling the rental demand, the study concluded.
