It is widely accepted that Wales is experiencing a sustained housing crisis linked to structural supply shortages, affordability pressures, and high demand.
We’ve prepared a new briefing which outlines the current causes of this crisis, including the role of migration in shaping demand.
In this article, we summarise some of those findings.
Census 2021, housing tenure, and country of birth
The 2021 Census is the only dataset in Wales linking country of birth to housing tenure. It shows that 28.7% of residents were born outside Wales, including 6.8% born outside the UK and 21.9% born in other UK nations, primarily England.
Housing tenure differed across groups:
- A higher proportion of residents in Wales who were born in Wales were living in social housing (17.9%) than those born in other UK nations (11.1%) or outside the UK (13.7%);
- A higher proportion of residents in Wales who were born outside the UK were living in private rented housing (35.9%) than those born in Wales (12%) or other UK nations (16.5%); and
- A higher proportion of residents in Wales who were born in other UK nations were living in owner-occupied housing (70.1%) than those born in Wales (67.7%) or outside the UK (47%).
Among the 22,054 people who had lived in the UK for less than two years, 68.7% lived in private rented housing. The likelihood of living in social housing or owner‑occupation increased with length of residence.
The role of migration in housing demand
Housing demand in Wales is shaped by demographic, economic and social factors including population growth, rates of household formation, incomes, the availability of mortgage credit, investment patterns, welfare policy and people’s expectations. Migration contributes to demand by increasing the population, its effects sitting alongside these wider drivers.
Recent population growth in Wales has been driven almost entirely by migration, given an ageing population and declining birth rates. Without migration, Wales’s population would have fallen by an estimated 44,900 between 2011 and 2025. Migration from within and outside the UK rose sharply after the Covid-19 pandemic, peaking in 2022-23, before falling again. By June 2025, net international migration was at its lowest level since 2010, contributing to a 0.1% population decrease.
Household formation is often a more meaningful indicator of housing demand than population growth alone. Between 2012 and 2024, the number of households grew by 6.0%, outpacing population growth. This is due to a number of factors including an ageing population, smaller household sizes, and net migration.
Evidence on the housing characteristics of migrants in Wales is limited. UK‑wide research suggests international migrants are more likely to live in private rented housing and experience overcrowding, though housing characteristics tend to converge with those of the UK‑born population over time.
Independent reviews consistently find that migration can add to housing demand in areas where supply is slow to respond. However, its long‑term impact on house prices is modest compared with factors such as income growth, credit conditions, interest rates and supply constraints. A 2026 Migration Advisory Committee report estimated that international immigration explains around 4-6% of the total increase in UK house prices over the last three decades.
There is limited evidence on the impact on Welsh house prices of migration from other UK nations.
Wider drivers of the housing crisis
The housing crisis reflects both supply-side and demand-side pressures.
On the supply side, decades of underbuilding have left Wales with a structural shortage of homes. On the demand side, population growth alone does not explain house price increases, since analysis shows that some areas with slow population growth have nevertheless experienced sharp increases.
Academic debate often centres on two dominant explanations for the housing crisis:
- planning-led: arguing that planning rules create additional costs; and
- financialisation-led: arguing that costs are inflated by the treatment of housing as a financial asset.
Other studies highlight pressures linked to welfare and poverty, social housing decline, and the distribution of the existing stock.
The key takeaway is that the housing crisis is not one problem with one fix. It is a set of connected systems that must be understood and addressed together.
Asylum seeker and refugee homelessness
Refugees and asylum seekers represent a small proportion of migrants, but scrutiny in the Sixth Senedd highlighted how the design of the asylum system, move-on arrangements, and data gaps create specific pressures for Welsh local authorities.
At the end of March 2026, 3,391 asylum seekers were receiving support in Wales, mainly in dispersal accommodation sourced and managed by Clearsprings Ready Homes under contract to the Home Office. Local authorities have reported concerns about sourcing practices, impacts on the private rented sector, limited community engagement and gaps in safeguarding information.
While there are no published national figures on refugee homelessness, a Sixth Senedd Committee heard evidence that the majority of refugees experience homelessness after receiving leave to remain. Local authorities highlight significant additional pressures linked to UK Government initiatives to speed up asylum claims.
What can the Welsh Government do?
The housing crisis has been described by some academics as a “wicked problem”, with multiple actors locked in a “harmful status quo”. There are tensions between the interests of those who don’t own housing assets and those who do. This presents governments with a set of difficult challenges.
Among the drivers of the housing crisis identified in this briefing, the Welsh Government’s ability to influence housing outcomes is strongest on the supply side. Through planning policy, land assembly, social housing investment, and regulation of the private rented sector, it can shape what gets built, where, and at what price.
By contrast, the main drivers of demand – interest rates, mortgage markets, welfare policy, immigration rules, and the wider macroeconomic environment – sit largely with the UK Government.
Welsh policy can reshape supply over time, but it cannot fully control the demand pressures that interact with it.
Article by Senedd Research, Welsh Parliament