Housing Is Now The Big Issue For London's Small Businesses

Rachel Holdsworth
By Rachel Holdsworth Last edited 81 months ago
Housing Is Now The Big Issue For London's Small Businesses
Like eating in Chinatown? Great, but where does your waiter live? Photo by Anatoleya from the Londonist Flickr pool.

Lack of affordable housing is now top of the agenda for London's small businesses.

"A year ago housing was just not on the agenda," says Sue Terpilowski, from the Federation of Small Businesses. "Not one of my members raised it with me, I had no correspondence from anybody about the issue. It's now the number one by far."

She highlights a case of a restaurant in Soho with a member of staff that's worked there for 30 years. He does the cashing up at the end of the night, but is now moving out to zone 6 and won't be able to stay late enough — if he stays at all.

"[The owner] could replace him with a waiter to do the service end," says Sue. "But you can’t replace the trust of 30 years to take the money. So the owner's going to have to start coming back in late at night and changing his work patterns, all because the person can’t keep his home."

Staff retention isn't the only problem facing the capital's businesses. "Staff are now much more transient because they’re Generation Rent. They don’t have the same loyalty and hold to an area via a mortgage, so they tend to come to London, do their London thing for a couple of years then move out. You don’t get the investment return that you put into staff training."

Can't businesses increase wages? What about the incoming National Living Wage, which will raise the minimum wage to £7.20 an hour for people over 25? "It's nowhere near enough," says Sue. "We’re hearing about 200%, 300% increases in rents. People are asking for raises of over 10%.

"A lot of our members do pay the living wage. Those that aren't, aren't paying it because they don’t want to. It's that the profit isn't physically there in the company. You're talking about some firms that are on 2%, 3% net profit."

She then highlights another peculiarity of the current situation, that means businesses can't help staff with housing costs. "In the past, if residential [property cost] was high, commercial property was low. When commercial property was high, residential was low. There was always a balancing act and you could find some spare money in the system. At the moment we’ve got extremely high residential and extremely high commercial. So that fat in the middle has disappeared."

There you have it. Is there anybody left in London who doesn't understand that we're in the middle of a housing crisis? And is anybody going to do anything about it?

Last Updated 16 March 2016