Mon, 10 Nov 2025

Mon, 10 Nov 2025 How does London's housing crisis affect the UK economy?

A "localised housing crisis" has become a "national problem", according to economic experts.

* London's economy has been stagnant since the 2008 financial crisis, and the city is struggling with a housing shortage and high house prices.
* The capital accounts for almost a quarter of the UK economy, but its underperformance is contributing to the country's overall productivity slump.
* High house prices are limiting the ability of skilled workers to move to highly productive roles in London, making it less attractive to skilled global workers.
* A "mass exodus" of people are being priced out of London, with many families forced to leave the city due to unaffordable housing costs.
* UK businesses are increasingly pivoting their hiring to regional offices and away from London, with 58% of head office jobs in financial services now based outside the capital.
* The government has forecast that building an additional 170,000 new homes could boost GDP by 0.2% by 2029-30, but recent figures show housebuilding in London is grinding to a halt.
* Meeting London's target of building 88,000 new homes per year could boost productivity in the capital by 5.6% and raise average take-home pay by £3,700 per year.
* Experts are calling for a "step change" in housebuilding and first-time buyer support to address the housing crisis and benefit the UK economy.
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