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Osgerby: Affordable living in London

BY PAUL OSGERBY | OCTOBER 13, 2014 5:00 AM

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I knew London was going to be expensive before boarding my flight over the Atlantic. The exchange rate isn’t in my favor, and the city has a reputation for increasing housing and living costs.

According to Pound Sterling Live, the current exchange is hovering around $1.65 U.S. for £1. Last week, it peaked around $1.72 for £1.

The London Evening Standard previously reported last month that a study conducted by a local business group and construction consultant found that 70 percent of 25- to 39-year-olds found it difficult to cope with the cost of their mortgage or rent. The study found that almost half of the workforce answered that they would “likely” move out of the city if the housing prices continued to rise, calling it a “brain drain” of young talent.

London is known for housing shortages and its dense population. Baroness Jo Valentine, the chief executive of London First, a firm that helped coordinate the study, said the housing demands must be met to keep younger talent.

“For a world leading city that owes much of its success to the services sector and knowledge based industries, losing a tranche of its young professionals would be disastrous,” she said.

Savills’ 12 Cities Report, geared to aid companies assess the prices of relocating employees, ranked London as the world’s most expensive city to live and work in. However, the Economist Intelligence Unit’s 2014 Cost of Living survey pegged London at No. 15.

In the London Borough of Islington, where my university is located, the average asking price to purchase a one-bedroom property is £434,000. A two-bedroom property is £718,000.

Even renting prices for one bedroom can range upwards of £700 in neighborhoods such as Whitechapel, according to fellow abroad classmates from Paris. Locals I’ve met have expressed how compact their living situations must be in order to find semi-affordable apartments.

To me, those kinds of prices would be a massive deterrent in considering a move for the glamorous British capital. Alternative living situations, such as cramming more bodies than fire code permits or squatting, would seem like the only option to meet those prices. However, the UK government passed a law two years ago that effectively makes squatting illegal, with fines up to £5,000.

The fact is that young people who seek affordable living situations must move to the outer or less desirable neighborhoods, such as Tottenham. Even then, grocery or amenity prices can be steep and, surprise, London’s public transportation network is one of the most expensive in the world.

Is there a bright side? The Centre for Economics and Business Research predicts the housing forecast will fall 2.6 percent for the first time in five years.

That an average pint of beer in a pub costs around £5 ($8) or a single bus ride costs £2 ($3.20) requires me to micromanage money a bit more I’d prefer. But at least the 17th floor view of the city from my dorm window is pretty hard to complain about.

Paul Osgerby is studying abroad at City University in London.


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