One city’s loss is another’s gain as it emerges that more than a quarter of companies in London have seen staff leave because of the housing crisis – and many are bringing their skills to the more affordable north.
A survey by the Confederation of British Industry (CBI) has found that 28% of London’s top businesses – 176 of them in total – had reported that some of their employees had quit because they couldn’t afford to live in the capital. Entry-level staff who earn lower wages have been particularly badly affected, according to the study, with 66% of firms saying that lack of housing affordability for lower paid staff had affected their recruitment levels.
Even at a senior level, 59% of the companies surveyed said they had struggled to recruit mid-level managerial staff because of the housing crisis in London, while 22% had had similar issues with senior level staff.
With properties now costing £472,000 in London according to the Office for National Statistics (ONS), compared to the UK average of £225,000, professionals of all ages are looking at their options outside of the capital, with news coming earlier this year that more people than ever are seeking opportunities in more affordable parts of the country such as the north and the West Midlands.
Eddie Curzon, CBI London director, said: “The potent combination of lack of supply and high prices means businesses themselves are being priced out of the market, as they can’t afford to recruit and retain their workers, from entry-level to senior staff.
“And with two-thirds of firms not optimistic the [London] housing market will become more affordable in the next three years, we have a stark challenge on our hands.”
Where are the most affordable places to live?
The news comes amid findings from the Office for National Statistics that affordability levels in general across the UK have worsened, with average homes costing 7.77 times the average employee’s earnings – rising to a huge 13.24 in the capital.
Those in search of more affordable places to live will find the best value for money in the north-east, where the ratio of house prices to earnings is 5.18. However, for a stronger housing market with better growth predicted in the future, many are choosing to invest in the north-west, where the affordability ratio is 5.81, and Yorkshire and the Humber with an affordability ratio of 5.91.
The West Midlands is also more affordable than the national average with houses costing an average 6.59 times the average household’s wages, and this region experienced impressive house price growth of 7.3% in the year to February.
A number of major firms have been opting to relocate or open major offices outside the capital in order to take advantage of both the increased affordability and the rising levels of talent in major cities such as Manchester, Birmingham and Leeds as more young professionals arrive in these areas.
Media City in Manchester, home to the BBC, has been a huge success for a number of years, while Channel 4 is set to move hundreds of staff out of London to an as yet unnamed city.
