Research conducted by the Confederation of British Industry (CBI) and CBRE coincided with the release of official data which revealed the severity of London’s housing affordability crisis.
The Office for National Statistics (ONS) figures showed housing affordability had worsened the most in London over the last five years.
In 2017 seven of the 10 least affordable local authorities were in London and all but five London boroughs had significant worsening of affordability since 2012, the ONS found.
77% price rise
Barking and Dagenham in London had the largest increase in unaffordability over the last five years, predominantly resulting from a 77.3% increase in median house prices since 2012.
The ONS also noted that in London even the areas with high house building generally had worsening affordability over time.
Increasing unaffordability was also spreading outside the M25 as affordability worsened significantly in 69 local authorities in England and Wales over the last five years, with more than three-quarters of these being in London, the South East and the East.
Employees leaving jobs
These factors are having an impact on employers’ ability to hire the right staff according to the latest CBI/CBRE London Business Survey.
Two thirds (66%) of the 176 respondents said housing costs and availability are having a negative impact on the recruitment of entry-level staff.
This figure is a record high for the survey and the housing shortage is also s serious concern for more senior employees, with 59% citing it as an issue for recruiting mid-level managerial staff and 22% saying the same for senior level staff.
Over a quarter (28%) of respondents said employees were leaving their jobs because they cannot afford to live in the local area, while nearly 62% do not believe the housing market will become more affordable in the next three years.
It is also having a knock-on effect on businesses’ ability to offer flexible working, with 36% finding it hard to do so.