The Mayor’s favoured hashtag #LondonIsOpen is commendable in so far as it captures the pro-diversity, pro-trade city our capital has long since been. But with average rents in the capital soaring past £1,700 per calendar month, and average London house prices standing at a staggering 15 times the median annual wage, it’s clear that London is not open for all.
It is open to the very wealthy, from the UK and abroad, but is prohibitively expensive for those wanting to come to London and find reasonably priced, quality accommodation.
Lower quartile rents stand above 40% of median net income in all London boroughs and 58% of private renters in work say that they have struggled to pay rent. CEBR estimates that because housing prices have easily outstripped inflation over the last ten years, the economy is missing out to the tune of almost £1.2bn a year as people are forced to spend money on housing costs that would otherwise have been spent on goods and services. This added spending would have supported nearly 11,000 jobs in 2015 alone, had the cost of housing in London been more manageable.
London’s population will reach 10 million by 2036, with most increases coming from domestic growth, not immigration. In order to make London truly open for all, we need to fix the housing crisis. There is general consensus among politicians, policy experts and civic society groups like Shelter, that this means doubling the rate of building to upwards of 50,000 new homes each year. Building at this level is not unprecedented. Between 1930 and 1939 we built 61,000 new homes a year. London’s population peaked at an estimated 8.6 million in 1939.
But in 2016, fewer than 22,000 homes were built, further compounding the shortage of homes we need to stay competitive as a city. More than three quarters of London First’s members say they’re concerned about the impact of the housing crisis on their ability to recruit and retain talent. To persuade government to act, it will be important for London’s employers to demonstrate how much they already do to support staff meet their escalating housing costs.
While it is ultimately the role of government, not business, to fix the housing crisis, there is plenty that business can do to help alleviate costs for its staff. The Mayor has this month written to 250 of London’s leading employers, asking them to sign up to the London First housing pledge. Employers that sign up, commit to supporting their staff in a range of ways, from paying the Living Wage, through to providing tenancy deposit loans. More than twenty companies have signed up already, employing more than a hundred thousand Londoners between them, showing real leadership over the need to help keep talented workers in London.
While such commitment from employers is necessary, it’s not sufficient. For business in London to continue to flourish we must build far greater numbers of homes for a growing workforce. Our goal is to get 50,000 new homes a year for London by 2020. That is why we will work side by side with the London Mayor and policy makers at City Hall and National Government, exerting pressure as required to achieve 50K homes for London. We hope you’ll join us.
You can sign the pledge online here.