The announcement by accountancy firm Deloitte that it will offer its new graduates in London the chance to reserve a two- or three-bedroom apartment exempt from credit checks, and with a short rent-free period, has probably got its competitors thinking.
However, of wider significance were comments from partner James Ferguson, who was quoted as saying: “London has an image problem as a place where affordable accommodation is hard to find.”
Taking into account recent research highlighting the exodus of young professionals from London to core regional cities such as Birmingham, this is more of a “stark reality” than an “image problem”.
According to graduate.co.uk, 60% of the population in inner London are graduates, earning average salaries of £27,000, compared with £24,000 in the rest of the country.
However, the costs quickly pile up, with a zone 1-3 travelcard costing £144.80 a month – an annual spend of over £1,700 on basic transport costs alone. By contrast, a Network West Midlands monthly zone 1-3 travelcard costs £82 (£984 a year).
With the average house price in London at more than £440,000, the burden of student debt and need for a large deposit means that home ownership is not a viable option for many.
This has led to a greater onus on private rented accommodation, with the number of people aged 25-34 who rent more than doubling in the past decade to 1.6m. Rental costs in the capital vary according to location, but even in outer areas – where travel costs are even higher – averages of £250 per week are more than double those of many regional cities.
Consequently, living in London has a much greater effect on overall living costs. Rental commitments alone typically account for over 70% of weekly earnings, compared with 45% outside London. This leaves little at the end of the month for graduates to enjoy.
One can only see the gulf between the housing-driven cost of living in London and cities such as Birmingham widening, meaning longer and more convoluted commutes and ultimately a poorer quality of life. This affects young parents too, whose priorities are to secure a quality of life and school places for their children.
In Birmingham we have seen a surge in popularity from graduates seeking a better quality of life. Around 58% of graduates who have opted to stay in the region embark on their working lives realising that a large regional city offers a very attractive real alternative to London.
As the more successful core cities in the UK grow larger, we must seize the opportunity to attract and retain the brightest graduates and young professionals.
Half a million people came to Birmingham in September to witness the reopening of the redeveloped New Street Station and visit the new Grand Central retail development.
Now is a great time for cities such as Birmingham to attract the skills needed to make regional core cities great contributors to the national economy once again.
Waheed Nazir is director of planning and regeneration, Birmingham city council
