London Chamber of Commerce calls for mortgages of up to six times income after new research finds fewer than half of young Londoners expect to afford a suitable home within a decade

More than three-quarters of large London firms say housing costs are damaging their ability to recruit and retain staff, according to research by the London Chamber of Commerce and Industry (LCCI).

Some 77 per cent of businesses in the capital employing at least 250 people reported problems with recruitment and retention because of housing costs.

The analysis also found that only 45 per cent of Londoners aged 24 to 35 expect to be able to afford a suitable property within the next decade.

And while 82 per cent of young Londoners said career opportunities were better in the capital, only 60 per cent said they saw their long-term future there.

LCCI has included the findings in its Budget submission to the Chancellor and is now calling for measures intended to make it easier for young workers to buy homes.

Among its proposals is a ‘London Mortgage’ that would allow middle and higher renters with strong credit scores to borrow up to six times their income.

The Chamber also wants lenders and credit agencies to take tenants’ rental-payment histories into account when assessing mortgage applications.

Another proposal would allow workers aged 18 to 28 to divert tax-free employee and employer pension contributions into a savings scheme for a first-home deposit.

LCCI, which commissioned YouGov surveys of 509 UK employers and 1,039 UK adults aged 24 to 35, is also calling for ‘London Prosperity Zones’, offering targeted incentives for housebuilding and redevelopment in areas where high land costs make schemes unviable, in addition to further planning reforms to unlock “grey belt” land with low ecological value that is currently classified as green belt.

Karim Fatehi OBE, chief executive of LCCI, said: “Skills, access to home ownership and ensuring firms can grow must all be seen as closely linked issues if we are to achieve UK-wide growth, and these findings are a clear testament to that. 

“Talented young people from across the globe have long aspired to live and work in London, but the challenge of owning a home here is increasingly threatening that attraction and harming businesses’ ability to recruit.

“With international rivals snapping at the capital’s heels, hypermobile young professionals are at serious risk of departing overseas, taking skills and the tax they pay with them.

READ MORE: Scotland’s £19bn food and drink industry faces ‘cliff edge’ as costs squeeze businesses. Industry leaders are calling for lower VAT, a review of higher employer National Insurance and clarity over business rates as some hospitality firms struggle with profit margins of just three per cent.

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