Britain needs to build an extra 250,000 houses just for migrants

BRITAIN needs to build an extra 250,000 homes just to accommodate the record number of migrants who arrived last year, City analysts have warned.

Investec said the chronic undersupply of homes in the UK would be worsened by the arrival of 606,000 migrants in 2022, adding to demand and pushing up rents and house prices.

Assuming an average household size of 2.4, the investment bank said the new figures implied “that around 250,000 new homes are needed just to satisfy the last 12 months of net migration”.

This would help to prop up the housing market, which has been hit in recent months by recession fears and rising interest rates, analysts predicted.

At the same time, a reduced rate of building and the UK economy being in better shape than expected are also continuing to buoy demand.

In the wake of the latest migration figures, Investec warned that the Government may need to revise its target to build 300,000 homes per year because the number was based on forecasts of inward migration that were much lower than current levels.

Analyst Aynsley Lammin, said: “The expected post-brexit drop in net migration and its impact on housing demand is not happening.

“High levels of net migration, combined with housing starts expected to fall by over 25pc on weaker demand and planning issues, imply that the housing demand-supply imbalance is set to be further exacerbated this year. ‘The expected post-brexit drop in net migration and its impact on housing demand is not happening’ The sector has enjoyed favourable demand-supply dynamics over recent decades, and it looks as though this is not going to change materially over the medium term.”

Even if developers increase building rates “supply is likely to continue to fall substantially short of demand”, he added.

One housing industry source said government policies and planning system snarl-ups meant it was “impossible” for builders to deliver enough homes to compensate for 2022’s migration figures any time soon.

Developers say they have been left hamstrung by the Government’s decision to downgrade the target for 300,000 homes per year to “advisory” – meaning councils can now ignore the goal. Stricter rules set by Natural England are also blocking new schemes.

Overall, the Home Builders Federation claims the policies will result in 160,000 fewer homes being built.

The industry source added: “The whole system is a complete basket case at the moment.”

Yesterday, Robert Jenrick, the immigration minister, said he was concerned that high levels of net migration were placing “intolerable pressure” on public services and on the supply of housing.