INSIGHT  VOICE  CONNECTIONS
Media release
15th October 2015
For immediate release
London’s housing crisis: new research reveals economic impact
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 data also
shows the pressure that high housing costs are inflicting on people working not just
in low-paid jobs but in many traditionally middle-class occupations.
The research has been published by a new business-backed campaign called Fifty
Thousand Homes which has been launched as employers across a range of sectors face
increasing competitive and staff retention problems due to the capital’s housing crisis.
Key findings of the independent study, conducted by the Centre for Economics and Business
Research (CEBR) for Fifty Thousand Homes, reveal the impact of high housing costs:
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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 (a result of businesses
benefiting from greater revenue and therefore being able to generate more jobs).
Impact on the money in people’s pockets: unnecessarily high housing costs are
removing £2.7bn a year in consumer spending or 1.6% of total consumer spending.
The economic growth (GVA) lost by diverting money away from more productive
expenditure will be £14.5bn between 2006 & 2020 – equivalent to £1.04bn a year.
Workers hit hardest
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.
Social workers, librarians, museum attendants, teachers, postal workers, and gym
employees are under extreme financial pressure as a result of rents taking up more than half
their salaries. Only the best paid workers – including company directors and those in
financial services earn enough to rent in central London “affordably” (less than a third of their
salaries on rent).
...more
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Andrew Dakers, Chief Executive of West London Business, one of the business
organisations that is backing the launch of the campaign, said: “The housing shortage
needs urgent action. In ten 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.
“Only doubling our current levels of house building to 50,000 a year across London will we
solve the crisis. This equates to about 10,000 homes a year in the North-West London
sub-region. The next Mayor of London must have an absolute focus on addressing this
challenge.”
Scott Corfe of CEBR, which conducted the research for Fifty Thousand Homes, said:
“Our research shows that the housing crisis is resulting in substantial costs to businesses
and risks undermining the capital’s position as a global centre of enterprise, talent and
success.”
Ends
Notes to Editor
Images & Caption:
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WLB_CEBR_Table_1: Occupation and industry of workers being priced out of London
WLB_CEBR_Table_2: Occupation and industry of the best paid workers earning enough
to rent in central London
Andrew Dakers, Chief Executive of London Business
About Fifty Thousand Homes:
Fifty Thousand Homes is a business-led campaign to double house building in London to at
least 50,000 homes a year by the end of the next Mayoralty in 2020, in order to protect and
enhance the capital’s competitiveness as a global city. The campaign coalition includes over
one hundred business leaders, along with the support of West London Business, London
First, CBI London, FSB London, Shelter, and others.
For business in London to continue to flourish we must build far greater numbers of homes
to accommodate a growing workforce. The campaign’s aim is to ensure that the Mayoral
candidates have credible and deliverable house building plans and for the new Mayor’s
house building plan to then be implemented.
...Notes to Editor continue overleaf
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About West London Business
West London Business works to ensure West London stays the best place to do business.
West London is the UK’s second largest economic powerhouse with £50 billion GVA and
70,000+ businesses. We are a business-led organisation with a blue-chip board that
includes corporations such as GSK, SEGRO and PwC, as well as key regional firms such as
Fullers and Brompton Bicycles. We have a membership of many hundreds, 9000+
supporters and 30+ events per annum, including the West London Business Awards.
Our commitment is to raise West London’s global economic competitiveness, whilst pursuing
social and environmental sustainability. We work towards these goals by providing insight,
voice and connections to our members and the wider business community. Through this
programme we inform and influence the work of local, regional and national government
policymakers and promote inward investment.
To find out more, visit www.westlondon.com
PR Contact:
Simon Wade, MCIPR, PR Consultant for West London Business
M: 07802 440246
E: simon@simonwadepr.com
www.westlondon.com