Workers flocking to the North due to soaring house prices

A housing crisis in London has never been so prevalent, lack of demand has been instigated through soaring prices leading to a migration to the North.

But what is one cities loss is another’s gain as it has emerged that more than 25% of companies in London have seen staff leave purely because of the severe trough in housing. Striking lucky for Northern regions, talent has moved further up the country and many are bringing their diverse skill set and injecting it into their chosen, more affordable, areas.

A survey delivered by the Confederation of British Industry (CBI) has uncovered that 28% of London’s top performing businesses, 176 of them in total, have reported that some of their employees had quit because they couldn’t afford the rising costs evident in the country’s capital. Those feeling more of a hit are those who are on a lower pay band as entry level staff who earn lower wages are those that are experiencing the detrimental effects more. According to the study, 66% of companies state that lack of housing affordability for lower paid staff has negatively affected their recruitment levels.

Furthermore, even at a more senior level, 59% of businesses surveyed said that they tried to tackle the problem of recruitment however still struggled to recruit mid-level managerial staff because of the staggering London prices inflicting a major housing crisis, while 22% had similar problems with senior level staff. Notably as the level of qualification or role increases, the percentage of companies endeavouring to recruit staff is falling, this is due to higher paid jobs leading to more affordability amongst the shocking London prices.

London property prices now cost around £472,000 according to the Office for National Statistics (ONS), compared to the lesser UK average at £225,000. This leads professionals of all ages, qualifications and backgrounds to look at options outside of the capital as latest findings assure that there are more people than ever before seeking opportunities in parts of the country that are more affordable, such as the north west in Manchester and Liverpool. Two of the UKs largest cities are undergoing huge regeneration with relatively low prices compared to the capital, combining great levels of capital growth alongside secure rental yields, proving a smart investment option.

Eddie Curzon, CBI London Director, said:

“The potent combination of lack of supply and high prices means businesses themselves are being priced out of the market, as they can’t afford to recruit and retain their workers, from entry level to senior staff.

“And with two-thirds of firms not optimistic that the London housing market will become more affordable in the next three years, we have a stark challenge on our hands.”

But where are the most affordable places to live in the UK? With news from ONS, affordability levels across the UK have experienced a decline, with the average home costing 7.7 times the average employee’s earnings, rising to 13.24 in the capital. Due to these momentous figures, the search for a stronger housing market and robust growth predictions in the future are sought after, hence why many are choosing to invest in the north west where the affordability ratio is 5.81.

RW Invest, property investment specialists based in the north west offer a diverse array of prosperous investment opportunities to build or diversity an existing portfolio. RW opt for developments in northern cities to take advantage of both the increased affordability and injection of talent across these major cities.

Kindly shared by Confederation of British Industry (CBI)