Business needs to raise its voice in the house price debate

Protests in the London suburb of Brixton broke out on Saturday over gentrification and rising house prices.

By London standards, Brixton's accommodation is still cheap. You can buy a one-bedroom flat at a price that would have got you a substantial house in an upmarket neighbourhood 25 years ago.

That is not possible in many other once-affordable parts of London, where buying a home is now beyond the reach not only of the poor but of the children of middle-class professionals too.

Rents in damp-stained rooms stretch the budgets of those in their first jobs in the professions, let alone people working in shops and restaurants.

Housing is often cheaper outside London, but not always. Oxford is now the UK's most expensive city.

A quarter of UK adults under the age of 35 are living in their childhood bedrooms, even though 72 per cent of them are in work, according to a study by KPMG and Shelter, the housing charity. It is no surprise that the cost of housing is a central feature of Britain's general election campaign, with the parties announcing new policies every few days.

Nor is it just a UK problem. Last year, protesters in San Francisco blocked buses shuttling Google and Facebook staff to work. The protesters said the tech employees had pushed up rents. Families could no longer afford to live in the city, where dogs now outnumbered children.

In New York, a two-parent two-child family needed $93,502 a year to get by, Elise Gould of the Economic Policy Institute told a city council hearing in 2013. Nearly two-thirds of that budget would be taken up by housing, child care and health expenses.

This is not just a problem for young people and families. It is a worry for employers - and a disaster for workplace diversity.

In many of the world's business centres, the only people who can afford to live there are those whose parents already have a home in the city or can afford to help them buy one.

In 2005, 69 per cent of those who took out a first UK mortgage did so without financial help from anyone else. By 2011, this had fallen to 35 per cent, the KPMG/Shelter report said.

"The 'Bank of Mum and Dad' is now a huge source of finance in the housing market," the report said, adding: "The growing dependence on parental assistance to buy a home has worrying implications for social mobility."

All that corporate guff about the "war for talent" and finding the best people regardless of background amounts to nothing if the pool of recruits is restricted to the children of the well-established and the very rich.

This is especially true when getting a job first requires a period of unpaid or low-paid internships. Any rent, let alone a high one, is an impossible burden during that increasingly necessary apprenticeship.

Companies see the problem. The CBI, the UK employers' body, last year said companies regarded "London's endemic housing problem" as a big barrier to hiring the brightest.

A few companies have acted. KPMG has teamed up with Clydesdale and Yorkshire Banks to offer staff mortgages at rates usually reserved for private banking clients.

Facebook is subsidising 15 low-rent apartments in a 394-unit residential development near its California headquarters. Facebook staff contributed to the design of the Anton Menlo project, which is due to open in October 2016. It will have a swimming pool, bicycle repair shop, dog-walking service and "pet spa".

These projects are well-intentioned but will hardly make a dent. The reasons house prices have risen beyond most people's means are complex and differ from place to place.

Some of the UK political parties' proposals, such as the promise by the Conservatives to allow housing association tenants to buy their properties and Labour's pledge of a three-year rent cap, threaten to create other problems without alleviating the price and supply ones.

The quality of the housing debate is largely poor. The KPMG /Shelter report is a rare sophisticated analysis, addressing land use, planning, taxation and infrastructure issues.

There should be far more of this. Company leaders have, rightly, spoken loudly about how important immigration and gay marriage are to their ability to recruit the best employees. They need to start doing the same about housing.

[email protected]: @Skapinker

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