An 'unprecedented' rise in immigration is helping push up Britain's property prices, economists say.
Research by consultancy Capital Economics shows a surge in immigration from abroad, especially eastern Europe, accounts for 20 to 30 per cent of growth in British residential property prices since 2004.
In that year the European Union expanded to include 10 eastern and southern European states whose citizens were allowed to emigrate to Britain, many of whom have done so.
Roger Bootle, the head of Capital Economics, said: 'Our estimates suggest that cumulative net migration to the UK has been 1.1 million since 2004, well above the official figure of 600,000. Assuming that all households in the UK [consisted] of 2.3 people, our estimates suggest that net migration might have been responsible for the formation of 480,000 households over the last three years.'
He considered it possible that his consultancy's findings understated the situation because historically based econometric models might not have captured the full impact of immigration on property prices in recent years.
He said interest rates, income growth and sentiment were the other big factors affecting property values.