The spiralling cost of living in London is becoming an increasing worry for companies in the capital, Britain’s biggest business group warned today.
The CBI called on Boris Johnson to help build more homes, as new research showed housing is now the second-most significant concern for businesses.
Only overall operating costs is considered a more important issue by companies operating in London, according to a survey by the lobby group and accountancy giant KPMG.
Housing has rapidly risen up the list of worries for businesses. It ranked third when companies were quizzed in December and fourth last summer.
“The shortage of affordable housing is becoming a potential investment barrier for businesses operating in London or looking to locate here,” said Sara Parker, the CBI’s director for London.
She called for “a laser focus” from Johnson on the issue, saying: “We cannot have a situation where Londoners are struggling to afford a home within reasonable distance from where they work. This issue needs to be urgently tackled before it becomes engrained.” Parker also claimed a reduction in red tape is needed to shorten the process of gaining planning permission for new housing as well as to release more public sector land to be developed.
With buyers flooding the market — figures out last week showed mortgage lending has reached its highest since the banking crisis — London has seen house prices soar.
The average asking price for a London house rose to £515,379 in July, according to property website Rightmove, up 12% on a year ago. Meanwhile, experts at estate agent Savills have predicted house prices in the capital will rise 6% this year.
David Gardner, the director of public policy at KPMG, said an increase in affordable housing “has to be an absolute priority”. He said: “We just cannot afford to wait another decade if we are going to keep attracting businesses and people to work here.”
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The call was echoed by National Housing Federation London’s Lizzie Clifford, who said: “Businesses are calling out for more homes. The Mayor and Government need to act urgently to make this happen.”
