With its array of job opportunities, enviable culture, and status as one of the greatest cities in the world, London has long been an attractive prospect for people of all ages. However, the old adage that “nothing is certain in London but expense,” coined by 18th century poet William Shenstone, still rings true today, and is driving many young people away.
Whilst the city has always been infamously expensive, it appears that youngsters have had enough. For instance, London was recently named as the most expensive city in Europe for renters for the third consecutive year, by consultants ECA International. The capital’s rent is also around four times more expensive than the average rent of other major UK cities. Seemingly every other living cost is also more pricier in London, for example—to the ire of many youngsters—the cost of a pint in London is double the global average, and one pub even came under fire recently for selling a pint costing £13.40.
In light of this, 20-somethings are increasingly seeking greener pastures elsewhere, and who can blame them? There are many places across the UK offering similarly attractive job prospects and an equal—if not superior—quality of life, yet with much more affordable living costs. Cheaper cities like Manchester, Leeds, Birmingham, and Liverpool are currently seeing greater city centre growth than London, transformed by rapid regeneration over the last couple of decades. The playing field is now more level than it ever was, and London is suffering as a result. How did it get to this, and is London really that unaffordable?
How London priced out the young
London’s extortionate living cost largely boils down to demand. As the capital of the UK and one of the most important business cities in the world, London will always create an abundance of jobs, so will always have an influx of people wanting to move to—and spend money in—the city. Cost will therefore continue to spiral as landlords and businesses alike know they can keep charging higher and higher prices, safe in the knowledge they will always have the demand.
For accommodation, demand is hugely oustripping supply. As the GLA’s Housing In London report shows, in the last two decades the number of jobs and people in London has increased by 40% and 25% respectively, yet the number of homes has only risen by 15%. With such a paucity of accommodation in comparison to the increasing demand for it, prices are only going to increase, as landlords know there will be an excess of demand for their properties.
The same can be said for other living costs. Pubs and restaurants know they can get away with charging more for food and drink because people are willing to pay these prices. As pointed out by The Guardian columnist Jonn Elledge, if a pub in a village started charging £5 a pint where everybody else charges £3, they probably wouldn’t last long. Yet, in London, “overpriced pubs can enjoy the safety of the herd”.
Some areas of London are still affordable
That said, it is untrue that young people are completely priced out of moving into the city; there are a number of places in the capital bucking the trend and offering decent value. As pointed out in removal experts AnyVan’s guide to moving to London, places like Deptford and Camberwell still offer real value in areas that are popular with a young demographic. The former has a large student population, keeping it from becoming too expensive and providing it with a youthful exuberance. The latter is packed with basement bars, museums, and galleries, and is located just minutes away from bustling Brixton.
Young people can also get some bang for their buck in locations situated more on the outskirts of the capital. Places like Enfield, Bromley, and Redbridge are all within a half an hour train journey to central London yet still offer outstanding value for those looking to work in the city. Whilst much of London is undoubtedly extortionate, there are still a number of places where young people can live, without breaking the bank.
Moving to London might not be sustainable in the long term
However, moving to London may not be the best idea in the long run. Whilst youngsters may be able to rent property, this could eventually be detrimental, as the chances of them ever owning a property in London are very slim.
Taking a real world example, FT demonstrated just how long it would take the average 22-29 year old to save up for a deposit on a cheap property. They looked at a studio flat on Holloway Road, North London that was on the market for £250,000, and amongst the cheapest homes in inner London. Taking into account that the median wage for Londoners aged 22-29 is about £29,900—and presuming they could get a 4.5 times salary mortgage—it would take them over 41 years to save for a deposit, provided they save 20% every month.
This makes the option of buying in London unrealistic for many people, and this can have real consequences further down the line. The ‘generation rent’ face the prospect of spending the majority of their income on their accommodation throughout their lives, meaning they will be unable to accrue any savings and are unlikely to be able to retire with a pension. If young people really want to move to London, they may still be able to find a relatively cost effective way to do it, but this bleak scenario shows that it may not be the wisest idea.