There's two factors that have driven an increase in demand for housing above population growth: fewer people per household and a strong bias towards living in a city. Some of this is cultural: a stigma against living with your parents, for example, and higher expextations for what someone just starting their career should be able to afford, but it's also economic: cities are where the jobs are and they're often not where people grew up, so if they want any independance they pretty much must move away into a city with everyone else.

There are many reasons demand is increasing, all good.

In the past a typical housing unit would be husband, wife, two kids. A 3 bed house. Divorce rates are higher now (better to be divorced than in an unhappy marriage - so that's good), so you instead you have divorced husband and one or two bedrooms for shared custody of kids, and divorced wife and one or two bedrooms for shared custody of kids

Thus what used to be demand for a single 3 bed house is now demand for two 3 bed houses, with no change in requirements

You are also right about cities, and not just any specific city. If you were born in London and get a job in Cambridge because you want to work for Astra Zenneca for example, that's a good thing. Having workforce mobility is a good thing, just because you are the son of a farmer doesn't mean you should be destined to be a farmer. You've also got people meeting and marrying people from outside their immediate geographic area, at least one of them will have to move.

There's then the social appeal of cities in general -- if you're the "only gay in the village" that's a miserable life. If you live in a city there's far more choice.

"living with parents" is on the increase, despite any "stigma".

> The number of families in England and Wales with adult children living with their parents rose 13.6% between the 2011 Census and Census 2021 to nearly 3.8 million.

https://www.ons.gov.uk/peoplepopulationandcommunity/populati...

Adults living with parents is not a good thing, and in the west it never has been. Adults should be independent, and learn to fly the nest and build their own lives.

Then you've got massive external immigration. As well as people moving from country and older mining towns, you have massive inward migration (in the UK this has reached an increase of about 1% population increase per year). This is a good thing for the economy (more workers, more productivity, more taxes), but comes with other issues - including more demand for housing.

You're forgetting AirBnB: turning housing inventory into hotel inventory since 2008.

No I'm not

This pressure group says there is too much airbnb

https://www.actiononemptyhomes.org/facts-and-figures

They say that over 97.5% of homes in London are in primary residential use, i.e not airbnb, not second home, not empty all year except for some wealthy oligarch coming for a couple of weeks.

The numbers might be slightly off as people are not reporting their use of airbnb, but

https://www.selfcatering.co.uk/reports/uk-airbnb-stats/

Claims just 50,000 airbnb homes in London, which is just 1.3% of the housing stock in London (and that 50k number includes those which are primary residential use but the current occupant moves out for a week if they get someone)

It's because it would mean looking at immigration numbers. If immigration creates far more demand than there is supply, as it does in various first world countries, then it makes house prices shoot up. But this is not a popular topic, as voters with houses don't care about their house prices going up, and voters without houses are generally younger and don't have the capacity to hear economic statements on immigration without auto-converting them into racial statements they've been warned about on CNN.

Is immigration higher now than it has been historically? How did immigration impact housing prices in the past vs now?

Depends on the place, but e.g. in the UK it's massively high. Almost as high as the US. (Just talking legal immigration; I don't know how to interpret illegal immigration stats.)

The UK takes in about 700k people a year net, and builds about 30k houses a year (which is probably about enough to cope with "natural" population growth.

Supply and demand. Dwellings get smaller (or subdivided) because people will pay more and get less. Landlords appear to solve the problem (and make a profit from the fact) that young people can't raise the capital to buy a full house themselves any more.

It's not the only factor - the jump to two-income households also raised prices massively and transferred a load of wealth to existing home owners back when that happened - but I'd say it's by far the largest factor today.