London’s housing shortageAugust 15, 2013
New research by Inside Housing magazine has found that in some parts of central London, some workers need to earn almost £100,000 to be able to rent homes defined as “affordable” (that is, up to 80% of market rate) by the Government, and still enjoy a reasonable lifestyle.
In the same week, it has been revealed that, London house prices have soared by 8.1 per cent since June 2012, fuelled by London’s housing shortage, and creating a risk of a ‘property bubble’ that will leave many Londoners unable to purchase a property in the capital.
This now means that house prices are outstripping wage inflation by almost double. If this trend continues over a prolonged period, it will inevitably have a negative impact on London’s ability to attract people that can afford to work in the city, and potentially on new business considering locating in the capital that will need to employ staff.
It is London First’s view that, if London is to remain a competitive place in which to do business, we must build more homes of all tenures to support a growing workforce, reduce long commutes into the capital and help attract the best and brightest talent to live in the capital. Without a drastic increase in house building, it is inevitable that London’s physical and economic growth will become constrained.