The Honteownership Attainntent of Lntntigrants in the Uk
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l l P a g eLondon School of Economics and Political Science Departmen t of Geography and Environmen tThe Honteownership Attainntent of lntntigrants in the UKMSc Real Estate Economics and FinanceCandidate Number: 10077 Word Count: 9792[pic 2][pic 3]A ugust2010[pic 4][pic 5]Table of ContentsIntroduction… 3Determinants of Homeownership – Theoretical Consideration… 6Demographic Determinants of Homeownership… 6Socio-Economic Determinants of Homeownership 7The National Origin of Immigrants as a Determinant of Homeownership… 8Locational Choice of Immigrants as a Determinant of Homeownership… 9Homeownership and Immigrant Assimilation: A Review of Past Literatures… 11Homeownership as an Indicator of Immigration Assimilation 11Empirical Models of Immigration Assimilation… 12Data and Methodology… 15Data Source… 15Descriptive Statistics 16Methodology and Results 22Empirical Methodology… 22Analysis of Socio-Economic Determinants 24Analysis of Household Locational Choice 28Analysis by Regions of Origin 30Analysis of the Homeownership Gap between Immigrants and Natives… 33Summary and Conclusion Remarks 36References… 39Appendix… 43IntroductionTraditionally, the United Kingdom has been a popular centre of attraction for immigrants from the rest of the world due to its relatively high level of living standard and well developed social welfare system. In the period between 2001 and 2009 the number of foreign born population increased rapidly from 4.8 million to 6.5 million, pushing the foreign born share to over 10% of the total population.1 Large scale immigration inevitably becomes an increasingly important factor in determining the economic and demographic trends in the United Kingdom.The ability of immigrants to adapt successfully into the social, economic and political life of their host country depends largely on their economic performance. In consequence, the study of the nature of immigration advancement is of considerable interest for policy makers.Starting with Grossman (1982), a large number of literatures have investigated the process of immigration advancement towards comparable natives. However, the majority of these studies concentrated on the labour market consequences of immigration advancement, such as employment and wages, which do not necessarily reflect the long-term economic and social well-being of immigrants.
The most immediate impact of immigration is on the homeownership market. In particular, high rates of foreign born population accompanied by low birth rates within the UK native population suggest that new immigrants will be a major injection of housing demand in the coming future. However, in the context of homeownership, only a few papers have provided empirical evidences for an assimilation process between immigrants and their native-born counterparts. As Sinning (2008) suggests, ‘In contrast to wages, homeownership permits inferences about the long-term integration process of immigrant minorities, since it represents an outcome of long-term economic progress and plays an important role in providing long-term financial security.’2 Moreover, Green and White (1997) found that, even[pic 6]1 ‘Immigration and Society – Who would live in a place like this?’, The Economist, p14, April 10th – 16th 2010 issue2 M. Sinning, “Homeownership and Economic Performance of Immigrants in Germany”,