Rocketing house prices and rents are costing London’s economy over a billion pounds a year and thousands of jobs, according to new research.
The research is being published by a new business-backed campaign called Fifty Thousand Homes – backed by West London Business. It highlights the increasing competitive and staff retention problems resulting from the capital’s housing crisis – workers can’t find homes they can afford, and businesses are being forced to pay staff more to attract and retain them, money which just goes to the landlord.
Key findings of the independent study, conducted by the Centre for Economics and Business Research, show:
• Businesses face a £5.4bn wage premium in 2015, equivalent to £1,720 per person. This is set to reach £6.1bn by 2020.
• Nearly 11,000 extra jobs could have been created in 2015.
• £2.7bn a year in consumer spending or 1.6% of total consumer spending is being wiped out by unnecessarily high housing costs.
• We will lose £14.5bn of economic growth between 2006 & 2020 – equivalent to £1.04bn a year.
It also paints a bleak picture for many workers in London, who are being priced out of living in the capital. Workers in shops, cafés and restaurants, those cleaning buildings, and those doing office admin would have to pay their entire pre-tax salary to rent an average private home in London.
Andrew Dakers, Chief Executive of West London Business, said: “The housing shortage needs urgent action. In 10 years’ time London risks being a no-go employment zone across all sectors and at almost all levels due to a lack of new build housing.”