Housing costs hurt hiring at 77 percent of large London firms, LCCI says

The survey

Source: London Chamber of Commerce and Industry, 15 September 2026.

London Chamber of Commerce and Industry released the findings on 15 September 2026 alongside its Budget 2026 submission. The figures come from two YouGov surveys conducted between 12 and 25 August 2026: one of 509 UK employers and one of 1,039 UK adults aged 24 to 35. Both samples were weighted. Among large London firms, defined as those with 250 plus employees, 77 percent say housing costs are damaging recruitment and retention. That single number frames the rest of the submission, because it links the capital's housing market directly to the ability of its largest employers to hire and hold staff.

The employee-side data points in the same direction. Among 24 to 35 year olds in London, 45 percent expect to be able to afford a suitable property in the next decade. That leaves a majority who do not. At the same time, 82 percent of young Londoners say career opportunities are better in the capital, and 60 percent see their long-term future in London. The gap between the 82 percent who rate London careers and the 60 percent who expect to stay is the space LCCI's submission occupies. LCCI itself has a 12,000-strong business network and was founded in 1881.

The emigration argument

LCCI cites ONS data showing that 246,000 British nationals left the UK in the year to December 2025, double the number returning, with three quarters of those leaving under 35. The chamber uses this to argue that the housing constraint is not only a domestic affordability issue but a retention issue measured in departures. The same submission cites UHY Hacker Young analysis of HMRC data showing London and the South East contributed 45 percent of the UK's 240.7 billion pound income tax bill in 2022/23. The tax base that funds public services is concentrated in the region where the housing pressure is most acute.

Karim Fatehi OBE, LCCI Chief Executive, said: 'We know London has a significant group of young workers who earn good salaries and have rented privately for many years, but cannot save anywhere near the average 140,000 pound deposit required to buy a house in the capital.' He added: 'If London cannot be a city where high-quality talent can build a career and eventually buy a home or start a family, we will lose out to other cities and countries around the world.' The 140,000 pound figure is the deposit benchmark against which the chamber's mortgage ask is set.

The five asks and what they would mean

The first ask is a 'London Mortgage' allowing renters with strong credit scores to borrow up to 6 times income. Most lenders currently cap at around 4.5 to 5.5 times income, and the Bank of England limits lenders to no more than 15 percent of new residential mortgages at loan-to-income ratios of 4.5 or above. A six times income product would sit above the prevailing market ceiling and interact directly with that 15 percent allowance, which is a share of each lender's new lending rather than a ban on individual loans. The second ask is for lenders and credit agencies to recognise rental payment history, which already exists in part through services such as Experian Rental Exchange and similar schemes.

The third ask would let first-time buyers aged 18 to 28 divert employee and employer pension contributions into a first-home savings scheme. Automatic enrolment requires a minimum 8 percent total pension contribution, with at least 3 percent from the employer, so diverting both sides changes both the saver's retirement position and the employer contribution flow. The fourth ask is 'London Prosperity Zones' with targeted incentives for unviable sites, funded by later business rates and council tax. The fifth is further release of grey belt land. Together the asks now sit with the Treasury ahead of the Autumn Budget.

KT analysis: the trade-offs

Higher income multiples raise what buyers can borrow. In a supply-constrained market they also tend to lift prices, which is the pattern the Help to Buy evaluation published by MHCLG on the same day found in expensive areas: the scheme lifted prices most in areas that were already less affordable. A six times income London Mortgage would therefore help the households that qualify while potentially shifting the entry price for everyone else, and the Bank of England's 15 percent cap on high loan-to-income lending is the mechanism through which any expansion would be rationed across each lender's book.

Diverting pension contributions helps a deposit now at the cost of retirement saving and of auto-enrolment employer matching, so the benefit is front-loaded and the cost deferred. Rent-history recognition is the least disruptive of the five asks because it is already partly operational. The ONS emigration figures show that 246,000 British nationals left in the year to December 2025 and that three quarters were under 35; they do not show why each person left, so housing costs cannot be isolated as the cause from the published totals alone. The five asks now rest with the Treasury ahead of the Autumn Budget.

Source: LCCI Budget 2026 submission (PDF).

Related coverage on Kael Tripton: FCA Mortgage Rule Review CP26/18: What It Means for First-Time Buyers, Self-Employed and Older Borrowers, First-Time Buyer ISA: Government Launches Consultation to Replace Lifetime ISA, Mortgage Affordability: How Lenders Actually Decide How Much You Can Borrow, FCA Mortgage Affordability Reform 2026: Proposed Rule Changes to Help More Borrowers, Help to Buy added 15 percent to new homes but lifted prices.

Frequently asked questions

What did the LCCI survey find about housing costs and hiring?

77 percent of large London firms with 250 plus employees say housing costs are damaging recruitment and retention, according to LCCI's surveys with YouGov released on 15 September 2026.

How many people took part in the surveys?

Two YouGov surveys were conducted between 12 and 25 August 2026: 509 UK employers and 1,039 UK adults aged 24 to 35. Both were weighted.

What is the London Mortgage that LCCI is asking for?

A product allowing renters with strong credit scores to borrow up to 6 times income. Most lenders currently cap at around 4.5 to 5.5 times income.

How does the Bank of England limit high loan-to-income lending?

Lenders may not exceed 15 percent of new residential mortgages at loan-to-income ratios of 4.5 or above.

What do the ONS emigration figures show?

246,000 British nationals left the UK in the year to December 2025, double the number returning, with three quarters under 35. The figures do not show why each person left.