Immigration drives down house prices, according to startling new economic research.

Preliminary findings from Dr Nils Braakmann from Newcastle University run counter to received political wisdom that the substantial influx of eastern European migrants over the past decade is one of the main causes of the sharp increase in British house prices.

Dr Braakmann’s research identified two reasons for the effect: local people move out of an area as immigrants move in and migrants tend to live in more crowded housing conditions, meaning they take up less space.

The research focused on local areas rather than the national picture. This means that migration could still have the effect of pushing up house prices at a UK level because of the pressure that displaced people put on the housing markets they move into.

However, London is the biggest destination for migrants to the UK, and has by far the biggest housing affordability problems. The research therefore suggests that the capital’s high levels of incomers are helping to keep housing more affordable than it would otherwise be.

The findings back up those of an earlier paper from academics at Cambridge university in 2011, which had similar findings.

Jonathan Portes, director of the National Institute of Economic and Social Research, said: “[This] suggests that fears that immigration raises pressure on already overheated local housing markets in London and the southeast are overblown; in fact it suggests that the knock-on effects of immigration are a modest balancing effect. Certainly it suggests that there is no evidence that immigration is pricing less well-off natives out of London.”

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