Migration and the Housing Crisis: A Question of Scale and Cause

The British housing crisis today is often portrayed as a story of spiralling migration pressures overwhelming an already fragile system. Yet when one examines the actual figures, it becomes clear that blaming migration — particularly asylum seekers — is both factually wrong and politically convenient. The real cause lies not in an external influx, but in decades of systematic underbuilding, privatisation, and financialisation of housing — structural failures that migration merely interacts with, but did not create.

As of December 2024, there were around 38,000 asylum seekers living in hotels, a significant increase from 29,585 in June earlier that year. This situation costs approximately £5.5 million a day, or roughly £2 billion a year. In addition, 65,700 asylum seekers are currently housed by government contractors, double the number from a decade ago. At first glance, these numbers appear significant. Yet when placed alongside the broader scale of the crisis, they are relatively minor. There are currently around 1.3 million people on social housing waiting lists, a figure that dwarfs the number of asylum seekers many times over. Even if every asylum seeker were allocated a home tomorrow — which they are not entitled to during the asylum process — it would barely dent the enormous demand.

The financial scale tells a similar story. The £2 billion annual cost of asylum hotels, while headline-grabbing, is minor compared to what would be needed to resolve Britain’s overall housing shortage. Estimates suggest that at least £10–12 billion annually, sustained over a decade, would be required to build sufficient social housing stock. Meanwhile, £52.6 billion is currently being extracted annually from renters — a figure close to 2% of the UK's GDP — driven by unaffordable private rents. The government’s £2 billion bill for asylum hotels is therefore a side issue compared to the wealth being drained from tenants across the country.

Moreover, the nature of housing demand itself reveals how limited the migration factor really is. The 9,638 people who crossed the Channel so far this year — even assuming the number rises to 30,000 by year-end — are a drop in the ocean compared to the estimated 200,000–250,000 new households created each year through internal population growth, relationship breakdowns, and other factors. Migration does contribute to housing demand, but only marginally. Even the Migration Observatory acknowledges that a 1% rise in migration correlates with only a 1% increase in house prices — far from explaining the double-digit surges seen in recent years, which are primarily driven by speculation and financialisation.

The deeper, longer-term structural causes of the crisis are well known but politically inconvenient to acknowledge. Since the introduction of Right to Buy, over two million council homes have been sold off. Very few were replaced. Today, fewer than 6,000 new social homes are built annually. Housing supply has failed catastrophically to meet demand — not because of migration, but because successive governments have chosen to dismantle public housing, deregulate private rents, and allow speculative finance to dominate land and property markets.

Thus, migrants and asylum seekers are easy scapegoats for a crisis that capitalism itself created. It is not 65,700 asylum seekers that have priced ordinary people out of the housing market, nor the 38,000 in hotels who have made rents unaffordable. It is the destruction of social housing, the financialisation of land, and a housing market designed to serve speculators rather than workers. Blaming migration allows politicians to evade responsibility for decades of failure, and the press to stir division rather than scrutinise power.

Moreover, the long-term consequences of this housing failure extend far beyond homelessness. As younger generations are locked out of homeownership, forced to pay escalating rents or live with their parents into their thirties, economic growth suffers. Housing costs now routinely exceed the 'affordability' benchmark of one-third of take-home pay. Birth rates are falling to record lows, adult social care is becoming unsustainable, and intergenerational transfers of wealth are collapsing as first-time buyers vanish. The government’s response — tinkering with stamp duty or slashing regulations on new builds — does not address the core problem: a system that treats housing as a speculative asset rather than a social necessity.

The tragedy is that the solutions are known. Britain built 300,000 homes a year in the late 1960s — a feat achieved through public investment and planning, not market forces. The postwar New Towns programme was a conscious, socialist intervention that prioritised need over profit. Today, only a similar level of ambition — mass social housebuilding, strict rent controls, land nationalisation — could begin to reverse the crisis.

In short, migration is a sideshow, not the cause. The housing crisis is a function of capitalism itself: its contradictions, its need for profit over human need, its subordination of homes to the logic of the market. Until that is acknowledged, Britain will continue to scapegoat the vulnerable, while the real culprits — decades of political cowardice and capitalist speculation — remain untouched.

We need a mass worker's party capable of putting forward demands on housing and infrastructure now.