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MHCLG publishes Raab’s immigration figures
Research controversially quoted by the housing minister last week has been published by the government after demands from the UK statistics watchdog.
Introductory remarks in the release, titled ‘Analysis of the determinants of house price changes’, describe it as an “ad hoc publication which estimates the indicative change in house prices over time which could be attributed to different determinants of house prices”.
The document adds that the analysis “is not intended to be exhaustive in its explanatory power and throughout this release references are made to limitations”.
It indicates that international migration caused house prices to rise 21% between 1991 and 2016.
During the same period, increases in household incomes caused a 150% increase in house prices, according to the research.
House prices increased 284% between 1991 and 2016, including inflation.
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In a high-profile interview with The Sunday Times last weekend, housing minister Dominic Raab said: “Based on the [Office for National Statistics] 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%.”
The Ministry of Housing, Communities and Local Government (MHCLG) later confirmed that this figure was produced using a statistical model produced by the National Housing and Planning Advice Unit (NHPAU), a quango which was abolished by the coalition government in 2010.
It said the figures were not in the public domain, leading the UK Statistics Authority to demand that the model be published.
The new release explains that the model in question was set out by a NHPAU report from 2008 based on research from the University of Reading, which set out principles for housing price growth.
These included that, holding all else equal, if the number of households increases by 1% then house prices increase by about 2%.
A footnote in the release adds: “In the short-run it is possible that the relationship between house price growth and increases in the non-domestic population are less strong than the relationship with respect to the overall population due to differences in household income and the propensity to form in the owner-occupied and private rented sectors.”
The trends identified “should be treated cautiously and used primarily to draw stylised inferences”, according to the release.
It adds: “The model estimates the national long run relationships assuming all other factors are equal.
“In reality, shifts to one of these determining parameters do not happen in isolation and changes to house prices are due to the interaction of many demographic, economic and societal factors.”
Update: at 10.01am 17/04/18: A further extract from the release was added to the story.
