Skilled worker cuts and student restrictions signal reduced housing demand
Net migration to the UK has declined substantially to 204,000 in the year ending June 2025, representing the smallest intake since 2021. The Office for National Statistics reports that this figure is down 720,000 from the peak of 944,000 recorded in the year to March 2023.
The contraction stems primarily from a sharp reversal in non-European Union national movements. Whereas approximately 900,000 people relocated to the UK during the measurement period, roughly 693,000 departed, a 43,000-person increase in outflow compared with the previous year. The exodus has involved particularly steep reductions in work-related and student visas, which both contracted by more than 60% over two years.
The composition of migration has altered markedly. EU citizens, including those holding EU Settlement Scheme status, registered negative net migration of 70,000. British nationals leaving the country totalled 109,000. Conversely, non-EU migration remained at 383,000, roughly double pre-Brexit levels, indicating a fundamental shift in the origin countries of migrants despite the overall downturn.
Asylum migration has become a larger component of total arrivals. The long-term immigration of asylum seekers reached 96,000, comprising 11% of all immigration—double the 5% proportion in 2019. Net migration of asylum seekers alone amounted to 90,000, equivalent to 44% of total net migration, in contrast to 22% before the 2016 referendum.
At 204,000, long-term international net migration (number of people immigrating long-term minus number of people emigrating long-term) for the year ending June 2025 was around two-thirds lower than a year earlier (649,000).
— Office for National Statistics (ONS) (@ONS) November 27, 2025
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"While net migration has returned to pre-Brexit levels, the composition is now quite different: non-EU net migration is still much larger than it was pre-Brexit, EU much lower, and a higher share of migrants are coming through the asylum system," said Madeleine Sumption, director of the Migration Observatory at the University of Oxford.
"Net migration has fallen substantially, but this will not necessarily be sustained long term. In particular, negative net migration of EU citizens who arrived before Brexit is currently still subtracting quite a lot from the figures, and this won't go on forever."
Employment-related visas have contracted considerably. Home Office data disclosed concurrently show that Skilled Worker visa grants fell to 133,000 in the year ending September 2025, down 57% from 308,000 a year earlier. This decline followed the closure of the Health and Care visa pathway in July 2025.
Implications for the mortgage sector
The sharp contraction in skilled worker and student visas signals reduced housing demand from high-earning professionals and prospective student populations. Fewer migrants obtaining work authorisation implies diminished mortgage demand from this cohort. Reductions in student visa admissions, particularly affecting dependants, further suppress demand from families seeking property. Meanwhile, increased asylum seekers are likely to sustain rental rather than purchase markets. Mortgage professionals should anticipate softer demand and potential pressure on property valuations in areas traditionally reliant on migrant populations and first-time buyers.
"The economic impacts of changes in migration depend on who is migrating, not just how many," said Ben Brindle, researcher at the Migration Observatory. "Much of the decline in net migration is likely to have small impacts because it results from groups like care workers and family members of students, who fall in the middle of the spectrum: not the groups with the most positive or the most negative economic impacts.
"However, it does seem that the composition of migration has become less favourable from an economic perspective, with fewer people getting skilled worker visas and a higher share of refugees, who often need a lot of support."
The Home Office has made headway in processing asylum applications. The backlog for initial decisions has fallen from 119,000 upon the administration's taking office to 81,000 by the end of September 2025. Nevertheless, asylum applications have reached record levels, with 110,000 lodged in the year to 30 September, the highest annual figure since records commenced in 1979.
Hotels accommodating asylum seekers have expanded rather than contracted. The number of persons in such accommodation rose to 36,000 by September's end, a 13% increase on June figures, while the overall number receiving asylum support grew by 5% to 112,000 individuals.
"While the government has managed to reduce the main asylum backlog significantly, today's data show just how hard it is to relieve pressure on the asylum system when applications remain high, and the appeals backlog continues to grow," said Peter Walsh, senior researcher at the Migration Observatory.
"Last week, the government proposed a series of changes to the asylum system, including plans to restrict asylum support to certain asylum seekers and reorganise the appeals system in the hope of receiving faster final decisions. The impacts of these measures are very hard to predict, and in any case it will take some time for them to work their way through the system."
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