Between 2012 and 2017, the number of people leaving London for other parts of the country skyrocketed by 80%. Even before a referendum on leaving the EU was a twinkle in David Cameron’s eye, the unsustainably high cost of living in the capital, coupled with the ongoing devastation of the housing crisis was driving Londoners away in droves.
However, it isn’t just residents who have been looking for an alternative home base; jobs are being lost, and eighteen banks have pledged to relocate their London hubs to Frankfurt in the years since the referendum result. Indeed, as CityMetric has reported, although London’s business economy has actually been thriving, its productivity—the quality of the available jobs and their attendant wages—has been on a downward trajectory. Coupled with the personal financial issues facing Londoners in recent years, and it seems like the damage to the capital could be irreversible.
This is, however, no guarantee, and measures are being put in place to try and encourage London businesses—and Londoners themselves—to remain in the city. Here are a few.
Keeping Londoners in London
The London exodus is mainly being carried out by older millennials—that is, adults aged between their late-twenties and early-forties. The main reason behind this is a lack of affordable housing, which has pushed younger Londoners out into the suburbs, and nearby counties such as Essex and Kent.
It isn’t just cash-strapped millennials who are making their way out of the capital either; even the city’s oligarchs and high net worth individuals are upping sticks and leaving their large residences unoccupied. This has been variously attributed to the introduction of taxes on second properties, the impact of Brexit and the rising crime rate in the city.
Indeed, one way to tackle both problems at once—occupying unused or abandoned second homes and keeping crime at bay—is through the use of property guardians, which vacant property specialists Oaksure describe as trained individuals who “remove the risk of a property being targeted by squatters, metal thieves and vandals”. Coming into prominence around the time of the ongoing vacant property crisis, 73% of London’s boroughs are currently making use of the scheme, prompting the Government to put legal rights in place for the country’s 7000-plus guardians.
London mayor Sadiq Khan also made tackling affordable housing a major part of his initial election campaign, and is currently working on his pledge “to build 10,000 new council homes…over the next four years” in the capital. £1.67 billion has been granted by the Government to begin work on this project, which is a bid to replace the controversial Right to Buy scheme which came into being in the eighties.
Will London lose its status as a business capital?
With so many more things to organise and implement as a result of Brexit, the business world is finding it far more difficult to keep itself together for the sake of staying in the capital. As the Financial Times notes, if the UK is set to leave the EU on March 29th 2019, “companies may have to boost warehouse capacity, ensure they have sufficient cash flow…and prepare for the event in customs”. To say the least, this is a lot to take care of whilst keeping an operation running normally in the first place.
Whilst the Government promises to mimic European financial rules as closely as possible for the sake of established companies, the crucial step will be to incentivise new British businesses. Government funding schemes are being proposed by the Chancellor to keep small businesses afloat and encouraging new ones to take the next step. Considering that SMEs currently make up over 99% of private companies, and create 73% of jobs in the private sector, ensuring there will continue to be innovative businesses is essential. New companies may also attract talent back to London, whilst also encouraging the major companies to train UK workers to meet the standards needed for the city to thrive.
So whilst the outlook may seem gloomy, whether from the effects of the housing crisis or Brexit, some work is being done to ensure that London’s reputation for greatness will encourage its talent to stay put.