Cambridge study suggests UK immigration may push down house prices

Areported by the Telegraph, even a tiny influx of foreign immigrants into a particular area can produce noticeable effects on the monetary value of local estates as wealthy people move away, reveals a Cambridge study.

The research, which is the first of its kind, goes against the popular belief that immigrants push up house prices, making them unaffordable for original residents. In a paper submitted to Filipa Sá (the annual conference of the Royal Economic Society), a Trinity College Cambridge economist makes a comparison between Land Registry property records and local job figures from the UK Office for National Statistics.

The economist found than an arrival of immigrants equal to 1% of the local inhabitants was connected to a 1.6% drop in median local property values. This is because nearly 0.9% of the "native" population moved away – usually more affluent people.

Miss Sá said the findings can be understood with two factors. First, some data suggest that immigration produces a negative influence on native wages for the lower tier of the wage distribution.

Secondly, natives who move away from the area are at the top tier of the wage distribution, she explained. This produced a negative income effect for housing demand and depresses house prices in local neighbourhoods where immigrants cluster, added Miss Sá.