4.7C Negative effects of government policies

• Government policies have contributed to the housing shortage through:

  • immigration
  • deregulation
  • second homes/holiday homes
• Immigration:

  • large-scale immigration from the EU, especially since 2004, contributed to increasing the UK population from 59 million in 2001 to 63 million by 2011. An open-door immigration may have economic benefits but it also creates demand for new houses. 
• Deregulation:

  • the UK is very open to foreign investment, including allowing foreign people and companies to buy property.
  • In 2016, the Guardian estimated that 40,000 London properties were owned by offshore tax havens. These properties may not be lived in, or even rented. 
  • Allowed any bank or financial advisor to trade in shares on the London stock exchange.
  • Barriers stopping banks and other financial institutes from setting up offices in London were also removed
• • Second homes and holiday homes: there are few restrictions in the UK on people buying houses to rent out, e.g. as a holiday let or buying a second home. In some rural areas a large percentage of houses may not be available to local people.
• • The main economic arguments for immigration are:
  • Increased gross domestic product (GDP) 
  • Extra taxes and production 
  • Both well-qualified and lower-skilled immigrants can fill skills shortages
• high levels of net migration can also hinder regeneration:

  • Increased pressure on services and housing availability in certain areas
  • Social issues caused by asylum seekers being housed in hard-to-let properties in already deprived areas, such as estates in Middlesbrough