Research by Savills has shown that property costs in London are three times what they are in the regions. The rising costs may force businesses to relocate out of London in order to minimise overheads. Average office rents in the West End are now £106.91 per square foot and in the City £75.70 psf. The London housing crisis also means that employees are unable to afford property in the capital and may prefer to live in more affordable cities like Birmingham or Manchester.
Rising property costs in central London could lead to a wave of businesses relocating outside the capital, research has claimed. A combination of having to pay higher salaries to staff so they can afford London housing and paying increasing amounts in office rent is causing companies to consider moving. Some businesses, including banking group HSBC, have already said they will open an office in another UK city such as Birmingham.