London’s housing crisis is a dire threat to the capital’s economy, business leaders argued at the launch today of a campaign for 50,000 new homes to be built by 2020
A study by the Centre for Economics and Business Research for campaign group Fifty Thousand Homes has found that businesses face a £5.4bn wage premium this year to compensate for employees’ housing costs. This is expected to rise to £6.1bn by 2020.
Many workers in the service industries would have to pay their entire pretax salaries to afford to rent an average private home, researchers found.
Responding to the report, a panel of chief executives from the tech, property and retail industries called for stronger government action to ensure diversity in affordable housing options for employees.
Juliette Morgan, head of property at Tech City, said she worked with young people who were living in “substandard” accommodation, sharing with up to 16 people.
Rupert Soames, chief executive of Serco, which employs prison officers and traffic wardens, and Campbell Robb, chief executive of Shelter, both said they had staff who had been priced out of the capital and faced long commutes.
Angus Knowles-Cutler, a senior partner at Deloitte, said her firm was now considering buying property to house its young staff, after a survey found 86% of people on their graduate scheme would like help with renting in the capital.
But the panel agreed that the only solution to the crisis was building more genuinely affordable homes for rent. Ideas included building on NHS land, giving councils stronger compulsory purchase powers and sharing land between different developers to speed up building.
Fifty Thousand Homes is a business-led campaign that aims to ensure that the next mayor of London has credible housing policies so that the city can accommodate its growing workforce.
