Poor graduates 'priced out of London'
09-20-2015
copyright PA
Bright young graduates from poorer backgrounds are increasingly unable to move to London, because of high housing costs, say researchers.
A study from the London School of Economics and the Sutton Trust says only 6% of graduates moving to London are originally from poorer areas.
Those moving to London after graduating are likely to be wealthier or to have parents already living in the capital.
The report warns of a growing barrier to social mobility.
The study warns that the pathway for young job-hunting graduates to move to the capital is now often blocked by unaffordable housing.
It says there are only two boroughs in London - Bexley and Barking and Dagenham - where average house prices are less than eight times the average income.
Locked out
The researchers say that this is distorting the intake of young graduates into the capital's jobs market and locking out those without financial support from their families.
Image copyright PA The biggest proportion of recent graduates moving into the London are those who have studied outside the capital but are originally from London and have moved back in with their parents, according to the study.
It means that among young graduates in London - with "young" classified as being up to the age of 34 - more are living with their parents than on their own.
And among those non-Londoners who have moved after graduation, an increasingly high proportion are from wealthier backgrounds. Fewer than one in 15 are from from poorest neighbourhoods.
In regional terms, only 2% coming to London are from the north-east England and 4% from the West Midlands. Among 20- to 34-year-olds, almost 70% of those "moving" to London are from families already in London and the South East.
The study indicates the population flow into London is predominantly among young people in their 20s.
But these graduates are now facing intense competition for somewhere to live. The study suggests the population in the capital is increasing more quickly than the housing stock, adding to the pressure on prices.
Sir Peter Lampl, chairman of the Sutton Trust education charity, said: "So many of our leading jobs are based in London, yet the current housing situation is making it increasingly difficult for graduates from less advantaged homes to move here.
"Our brightest young people deserve the same chances to reach the top of their professions or to be able to turn their talents into businesses whatever their background."
As well as the high cost of property and rent, he said, young graduates could also have to take unpaid internships, adding to the barriers to those from disadvantaged backgrounds.
As possible ways of tackling this "housing trap", the report suggests building "student-type" shared affordable housing and "factory built pre-fabricated housing" that could be built quickly and cheaply.
The pressure on housing has seen graduate recruiters offering their own support for housing.
From this year's graduate intake at Deloitte, 40 new recruits will move into apartments in the former athletes' village beside the Queen Elizabeth Olympic Park.
Deloitte says that surveys of its young graduates found the lack of affordable accommodation in London to be a major concern.
It found "prohibitive" costs meant one in 20 of last year's graduate intake had to share a bedroom, while others were squeezed into communal living spaces that had been converted into extra bedrooms.