Clarendon Serviced Apartments Investigates the Effects of Rising House Prices in London on the Business Community

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Working should be more flexible but rising house prices in the capital could impact on the ability of workers to take advantage of career moves. If young professionals are pushed out of home ownership in London could this impact on its business culture?

They say the two most stressful periods of your adult life include moving house and starting a new job. Relocating means doing both at the same time, which is why it can be a daunting process. As the economic outlook shifts from the red into the black many businesses are looking to boost their staff numbers. London is a huge draw for young professionals at the start of their career as many of the world’s top firms operate from the capital. Yet for major cities like London where house prices are rising again, could expensive property and the difficulty in finding a house put off prospective movers? If it is felt that it is too difficult to buy a house in the capital, will young professionals be put off moving there altogether?

After six years of falling house prices recent figures from Savills UK have prompted as much concern as positive welcome. House prices in the centre of London have increased 116% since 2005. While 93% of 55-75 years olds say they see owning property as an “ultimate goal” only a third of fewer than 35s thought the same. Home ownership is something they feel is out of their reach. The continental European culture of renting is continuing to grow. Youngsters aged between 20 and 35 cannot see themselves being able to afford a house deposit until they are at least 36. When once the idea of not being able to afford your own home in your 30s seemed embarrassing, increasingly it is the norm, in London at least. Over half of Britain’s aged fewer than 35 live in a home they don’t own.

There is as large a downside to this news for London’s business community as there is cause to cheer for buy to let landlords. Homeownership makes a generation feel tethered, feel connected and more likely to lay down roots. Renting exacerbates a sense of flexibility, of the ability to up sticks and move quickly. Business does not want to feel as though it has a workforce that doesn’t feel committed to the city and their employers. Post downturn, business wants to be able to hire more staff and encourage them to relocate to the capital. High house prices could put people off from moving, especially if they are young.

For those who cater for the business travel industry, like Clarendon Serviced Apartments, there has been a rise in those looking for serviced apartments in the last 25 years. Increasingly, businesses and workers are looking for temporary accommodation or a short term fix when they are moving to London. Serviced apartments are more cost effective than hotels and they offer a home from home by virtue of a fully fitted kitchen and en suite bathrooms. Serviced apartments are in a range of locations from the West End to The City making it easier to find accommodation to suit needs.

What will a decrease in home ownership but a rise a temporary accommodation mean for business? It could mean that a working population is still happy to be flexible. Relocation increasingly might become a focus for under 35s, for younger professionals looking to gain experience on the move before they invest in a home, set up roots and start a family. The halfway house of business needing more staff to expand but rising house prices mean serviced apartments are a good stopgap in a changing culture. What it means in the long term remains to be seen.

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Amardeep Dharwar
since: 04/2009
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