News that average house prices in London are now 10 times the average salary have added to earlier announcements that UK commuters face the highest commuting costs in Europe to hit potential employees in the capital with a double whammy.
According to an interim report from the London Housing Commission (LHC), published by the Institute for Public Policy Research (IPPR), house prices are now 44% above pre-crisis levels and the average deposit required is over £70,000.
Meanwhile rents continue to outstrip earnings with weekly pay increasing by 2% in the last five years while rents have grown by 16%.
The report also highlights that London Boroughs in the 1970s built more than half of London’s homes: last year they built 280.
Lord Bob Kerslake, who chairs the LHC, said: "Make no mistake — the capital is in the midst of a housing crisis but it’s of a different order to any housing crisis London has experienced in the past. Decent housing and the idea of home ownership is becoming more and more out of reach of ordinary Londoners."
Businesses are being detrimentally affected, he highlighted, as current and potential employees are being priced out of taking work in the capital. In addition, public services are struggling to recruit while low-income households are being forced out of the city by rising rents and frozen entitlements.
Unless a new strategy is adopted which will increase building and improve the private rented sector, the problem for London employers will be clear: where are they going to find recruits who can afford to either live or to commute into the capital?