London faces ‘reverse brain drain’ as housing costs mountSeptember 26, 2014
Workers could quit London in their droves in the future as many struggle to pay rocketing housing costs, according to new research commissioned by global construction consultancy Turner & Townsend and London First.
It raises serious concerns about a ‘reverse brain drain’ from London, with many workers saying they would consider leaving the city due to difficulties with paying their rent or mortgage.
Those in the 25-39-year-old age bracket struggle the most to work and meet housing costs in London, according to ‘Moving Out: how London’s housing shortage is threatening the capital’s competitiveness’.
This threat is echoed by businesses, with three-quarters of those polled warning London’s housing supply and costs are “a significant risk to the capital’s economic growth”.
Two out of five businesses already say they are concerned about the impact that London’s housing supply and costs are having on their ability to recruit and retain staff.
Over half of employees surveyed said rent or mortgage costs make it difficult for them to live and work in London.
Of those who said rent or mortgage costs make it difficult for them to live and work in London, 41% said it is likely they would currently consider moving out of London and taking a job in a different city or region to take advantage of lower rent or mortgage costs.
When asked how likely they were to move if housing prices continued to rise, nearly half said it is likely that they will consider moving out of London, outnumbering the 44% who said they were unlikely to leave.
The 25-39 age employee group is hardest hit in comparison with other age groups with 70% saying they find the cost of their rent or mortgage makes it difficult to work in London.
It is not until respondents earned in excess of £70,000 that the number who were likely to find it easier to service mortgage and rents generally outnumbers those who find it difficult.
In terms of age, only once respondents pass 60-years-old do the number finding it easy to pay rent or mortgage start to balance out with those who find it difficult.
High costs of both renting and buying are being driven by a major under-supply of housing, with the city growing by 100,000 people a year and less than half the number of new homes needed being built in the capital.
Baroness Jo Valentine, Chief Executive of London First, said: “London’s chronic housing shortage is already making it difficult for many of those with the talents the capital needs to live and work here, and this problem is only going to get worse unless we start building more homes.
“The large proportion of Londoners in the 25-39 age bracket who are struggling are of particular concern.
“For a world-leading city that owes much of its success to the service sector and knowledge-based industries, losing a tranche of its young professionals would be disastrous.”
Jon White, UK Managing Director at global construction consultants Turner & Townsend, said: “The construction industry has already stepped up to the plate to address London’s chronic need for more homes, but it would perform even better if it were able to unlock development sites in a more cost effective way.
“The cost of building the infrastructure needed by new developments can be prohibitive, but we’re increasingly seeing developers and utilities providers working together to share the expense.
“Developments in building technology can also be great enablers, and Turner & Townsend is leading the roll-out of cost-saving innovations like factory-built housing units and high quality kit construction.
“Project design should allow for future growth, and ensure that roads, stations, schools and hospitals can be expanded if needed. This will ensure that extra capacity can be delivered at less cost and with less disruption.
“Finally, the planning process can be speeded up if developers engage early with existing communities. Dialogue that addresses residents’ concerns can improve the design process and help get new homes built more quickly and sensitively.”
For more information on how Turner & Townsend can help you find solutions to housing delivery, please email Steve Perkins at email@example.com
For more information on London First’s work on housing, planning and built environment, please email Jonathan Seager at firstname.lastname@example.org