This paper estimates the effect of the presence of asylum seekers on local housing prices in England and Wales. UK legislation requires that government provides housing accommodation support to asylums seekers who are waiting for a response to their claim, subject to a destitution test.
The analysis draws on housing prices in the UK Land Registry together with detailed information from the UK Home Office on asylum seeker flows and their accommodation across the UK from 2004 through 2015 for all 347 local geographic districts across England and Wales. In 2015, 26 local authorities accommodated 75 percent of all asylum seekers, while over two-thirds of local authorities did not house any asylum seekers.
- The number of asylum seekers given housing accommodation had negative effects on housing prices in England and Wales for regions that participated in the UK’s housing dispersal program. House prices in districts that did not participate in the UK’s dispersal scheme were unaffected by an increase in asylum seekers in neighboring districts.
- Prices declined more in neighborhoods with lower-priced, lower-quality housing units, indicating outmigration of residents in these locations. Prices for flats, terraced units and semi-detached homes declined more than prices for detached homes, suggesting outward movements of residents in areas that received asylum-seekers, which did not occur in better off areas.
- Negative house price effects are larger in areas that supported Brexit.
Overall, the results suggest that inflows of asylum seekers have distributional effects on housing prices—lowering the prices of more affordable housing relative to housing in better off areas. This suggests that neighborhoods hosting asylum seekers, which tended to have more low-cost housing, had an outmigration of residents that put downward pressure on house prices. Additionally, the negative effects were stronger in local authorities that voted in favor of Brexit. The authors conclude that negative attitudes toward foreigners, as reflected in Brexit voting at the local level, is likely to have played some role in the negative housing price effects of asylum seekers.