About 48% of renters in their 20s who have changed their accommodation have moved outside the capital this year, according to data from real estate company Hamptons. It comes at a time when rents are rising sharply, increasing by 16% year-on-year in September – an increase that outpaced the 9% average growth in Europe. This was commented by Milen Simeonov in the show “Business Start” with host Roselina Petkova.
According to the Hamptons, higher costs are causing more young professionals, even in relatively well-paying jobs, to leave, resuming a long-standing trend that was reversed by the onset of Covid-19.
A combination of factors is driving up rents in the city, including rising interest rates that have raised mortgage costs for landlords and driven more potential buyers out of the real estate market, creating more demand for rental housing. According to British rental site Spareroom, in September this year there was only one for every six people looking to rent – one of the tightest markets in recent history. Bidding wars and long lines to rent a home have become commonplace.
Still, there are signs of some easing in demand as more people move out of the city or, in some cases, decide to live with family members. According to the UK’s Office for National Statistics, the number of residents living with their parents in the UK has increased by 15% in the past decade.
Over time, the impact of higher rents is likely to make London a less diverse and older city, says Christine Whitehead, professor of housing economics at the London School of Economics.
The gap in disposable income between London and the UK average is the highest it has ever been, according to figures from the Office for National Statistics since 1997. The average London household has 43% more than the national average, compared to 22% more than 25 years ago.
Class has a particularly big impact on people’s futures in the UK, and a Goldman Sachs report last year detailed how social mobility in the country is worse than in all major EU economies. This increases the pressure on companies to address these workplace imbalances. Part of the reason businesses struggle to tackle this problem is a lack of data. According to research group Progress Together, understanding internal demographics is one key way to tackle the problem.
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2023-11-20 20:09:00
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