The UK government must “take care” not to replicate the Irish housing crisis in London, Blick Rothenberg has warned.
Blick Rothenberg head of property, Heather Powell, cautioned that recruitment teams at major employers in London are reporting that graduates who had accepted places on training contracts are deciding instead to accept jobs in other cities.
These graduates have cited the cost of renting a home as a “major factor” in their decision to look for positions outside the capital.
“Even higher earners are deciding to move out of the region because of the size, and the quality of the home they can afford is significantly greater away from London,” she added.
Powell warned this could lead to London experiencing the same housing crisis as Ireland and, if so, businesses in London may have to rent or buy homes for their employees.
“Housing costs in Dublin are among the highest in the EU, and major employers are having to rent or buy homes for their employers,” she explained.
As examples, Powell pointed out that Ryanair Holdings, food retailer Musgrove and Windmill Healthcare Group have bought or rented a combined 103 properties in Dublin for their staff.
She added that London businesses could find themselves in a similar situation unless the UK government directs further funding to the provision of affordable housing.
“Affordable housing, especially in London, is required to facilitate the economic expansion of the UK economy, on which all the UK government’s plans are predicted to be delivered,” she stated.
“Great care must be taken or we will see a replication of the Dublin housing crisis and all the difficulty that it can create for business.”
While Powell acknowledged that the UK government has announced the building of 1.5mn homes over the term of the next parliament, she pointed out that those new homes will need 1.5mn buyers.
“Individuals and Social Housing Providers do not have the funding, or ability to raise the necessary funds to buy,” she said.
tom.dunstan@ft.com
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