The London metropolitan area is set to grow by 1m people and over 500,000 households by 2025, according to data from GlobalData Cities.
This population expansion will act to keep driving house prices ever higher, and force London-based workers to live far from their workplaces, suffering long commutes.
With that in mind, it is time for employers to take action to help their workers.
This would not be a purely selfless gesture.
High housing costs in cities harm productivity and hinder economic growth; force existing workers to move further from their work, or into smaller accommodation in order to ensure affordable rent.
Long commutes amplify the effects of any transport delays and reduce employee energy and concentration, while cramped living makes it hard to relax and recuperate after a day at work.
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The consequences are not limited to a city’s existing citizens either; high house prices lead to very high relocation costs, making it difficult for companies to attract top talent and dissuading people from moving to the city for other reasons.
While the UK government is attempting to control house prices through attempting to encourage development and streamline the planning process, the problem has been in development for decades and any solution is likely to require a comparable timeframe and involvement from many sectors.
What can be done?
Conservative MP William Wragg (notably unable to afford a house while working as an MP) said: “There is no magic wand to solve the housing shortage. It will require many years of investment, hard work and difficult choices”.
Action will be needed from government, private developers, and employers to minimise the impact and speed recovery.
Employers play a big part in driving housing demand, and there are many possible courses of action they could take to lessen the burden on their staff.
Obviously moving headquarters to regions with lower property prices is an effective strategy, but one with many costs making it unsuitable for most firms.
One solution less drastic than wholesale relocation is to take advantage of technology and set up small offices outside the city proper that would be dedicated to specific tasks.
Small, decentralised offices let employees live in cheaper areas farther from a city while keeping high productivity and connectivity using technology, and close enough for in-person meetings as needed.
A more extreme option being considered by companies such as Facebook and Google is employer-assisted housing schemes, offering affordable housing or a shared mortgage as a perk to employees. This ensures employees have a shorter commute and good accommodation, leading to higher efficiency at work and improved loyalty.
As it stands however, the economic powerhouses are suffering stunted growth from the widening gap between their cost of living and that of mid-sized cities.
The 21st century is set to see the world’s biggest cities dwindle in importance, and here housing costs are going to play a crucial role.