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Young workers could leave London in their droves due to its housing crisis. But this situation might present a silver lining for other regions in the UK…
Iona Bain
Recently, a Panorama programme and spate of new statistics were confirming what all of us already knew – our housing market is the dictionary definition of dysfunctional, and London’s property chain is pretty much falling apart.
Looking at this from a 25 year old’s perspective, it’s clear that we have all underestimated the impact that this housing crisis will have on London’s young workers and, in turn, the city’s economy. And before you say this analysis excludes the rest of the country, let me reassure you that this could well restore the economic vitality that has been missing from so many areas for so long.
To the awful disadvantage of many regions, many centres of opportunity now reside in the capital, based in a variety of exciting and high-prestige professions.
This treasure trove of opportunity has naturally drawn graduates and young workers from all over the country (myself included), who do not see a bright future in their home towns and regions.
But this is a two way street. London’s businesses need us as much as we need them. And we are increasingly horrified at the price we have to pay to live in the capital. Squalid living conditions, a tiny disposable income and no hope of ever owning a home. No wonder many of us would rather go back home, live with the family, even switch careers to avoid that dreary fate.
So the pipeline of talent narrows. A skills shortage opens up. Only those who can get help from their parents, either through a deposit or living in a London-based family home, will fill the positions. Young people from all kinds of backgrounds who could inject fresh, diverse thinking into businesses disappear from view. Big business gets hooked on cheap foreign labour. A lovely Polish girl working at my local branch of a big high street shop tells me she cannot visit her mum back home because her boss won’t let her take a day off. Young British workers just won’t stand for this.
But if we start to desert the capital, so will many companies. Some will go abroad, which would be a blow to our overall economy, but many could follow us back into various corners of the country. Manchester has already overtaken London as Britain’s most vibrant urban economy due to an influx of young talent, according to Experian.
As the capital’s housing crisis continues to escalate, expect more cities to leapfrog London in that index. You read it here first!
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Why is London so expensive? Quite simply, because the demand for properties in the capital far outstrips the supply of homes. To demonstrate this, when a four-bedroom property in West London was worth £400, a return bus fare to Liverpool Street cost 3.5p.
Today, that same property is worth about £400,000, while a return cash Tube fare to a Zone 1 station from Zone 3 is £9.40. This means housing values have jumped 99900% compared with a 26757% rise in transport costs.