Migration of young London workers gathers pace

New research has found that more young professionals are leaving London than arriving, due to the high cost of living and house prices.

House prices in London and the high cost of living are causing young workers to leave the capital.
London is losing its traditional attraction for young professionals, with more workers aged between 25-34 now moving out than moving in, according to a survey published on Monday.Although the outward migration – mainly caused by the high cost of living in the capital – is providing a talent boost to UK regions, it is exacerbating the skills shortage being experienced by the majority of London businesses.

Millennials can’t afford house prices in London

The report from Totaljobs – based on data from the Office for National Statistics (ONS) and a survey of 2,000 young workers in the capital – found that since 2014, more than one million professionals had left London, with just 900,000 coming in.This represented a net loss of 88 workers every day, with the biggest shortfall among workers aged 25-34; 54 per cent of whom reported given up hope of ever owning property in the capital. There has been a 49 per cent increase in outbound migration of those in their 30s over the past five years, the report added. "Looking ahead, this trend is set to grow with a quarter of London’s Millennials already planning to move away from the capital," said Totaljobs. "This could amount to a further one million workers leaving London, with inbound migration falling short in replacing them. Totaljobs estimates the average age of a worker leaving the capital is 32 years and eight months – an age which could be set to get younger."The survey found that 43 per cent of young workers expected to move out of the capital before they turned 33, with a quarter of them already planning to do so. Millennials looking to move cited the city’s high living costs as a factor, with more than half saying it was unrealistic to think they could ever afford to own a home in London.

How can companies hold on to talent?

With 62 per cent of London businesses reporting recruitment challenges, the flight risk among the capital’s workforce showed that holding onto talent might become a high priority, said the report.It added that of those who left London in 2018, almost two-thirds moved far enough away so that they were no longer within a commutable distance and, therefore, no longer part of London’s workforce.Jon Wilson, CEO at Totaljobs, said, “Our research shows the challenge London’s employers face in holding onto some of their staff, and with widely reported skills shortages, it’s vital that they do so. “While some factors may be out of their control, businesses focused on retaining talent can consider how they can encourage movers to settle within a commutable distance – be it through offering season ticket loans, more flexible working hours or the opportunity to work remotely.”
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Mr Wilson added, “For those who can’t be swayed, employers can offset the impact on their business through clear succession plans. Investing in training and mentorship programmes can ensure those leaving pass on their knowledge and expertise to more junior colleagues.“However, this migration trend also presents a real opportunity for employers based outside of the capital to attract highly skilled and experienced people looking to relocate. With local job opportunities being the deciding factor for a quarter of movers, regional employers should look at the most common reasons people are looking to move out of the capital to create enticing relocation packages.”

Knock-on effects of the housing market 

Professor Geraint Johnes, professor of economics at Lancaster University, who assisted in the compilation of the report, commented, “This analysis has revealed a large increase in net migration out of London among those in their 30s and suggests that this trend is likely to accelerate into the future, with 41 per cent of 25-34-year-olds looking to move out of the capital in the next six years. Reducing the cost of living is a major factor, while being able to afford to buy a property and raise a family are major considerations in prompting a move.“Unless a slowing housing market puts a brake on this trend, it’s likely to have important consequences for business. As young people add years of work experience to the stock of skills with which they came into the labour market, they become increasingly productive and climb the ladder, but as they leave, London businesses may find it harder to retain experienced staff and recruit into the more senior managerial roles.” 

Read more news and views from David Sapsted

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