One clue that this is the case came in official figures last week showing a significant increase in the number of EU citizens leaving Britain last year. Is it really an accident that this has coincided with a steep decline in house price inflation? The Halifax house price index next week could show a drop in house price inflation to its lowest rate since 2013. Migration affects house prices.
This is by no means the only evidence. Tarun Ramadorai and Cristian Badarinza have shown that London house prices are driven in part by political uncertainty overseas. An increase in instability in, for example, Pakistan, leads to higher prices in areas where Pakistanis are disproportionately likely to live. This shows that London prices are driven by a global safe-haven demand. And to the extent that variations in London prices spread to the rest of the country, it follows that there's a nationwide effect.