London businesses have warned the Prime Minister that the capital’s housing costs are damaging their ability to hire and keep staff, and that growth “in every postcode” cannot be delivered if the forthcoming Budget makes London less competitive with rival international cities.
Polling commissioned for the launch of the London Chamber of Commerce and Industry’s (LCCI) Choose LDN campaign found that 74% of London business leaders say the cost of housing is limiting their ability to recruit and retain staff. The chamber, which has a business network of more than 12,000, said losing the next generation of talent would weaken the capital’s standing against other global cities and put jobs, investment and growth across Britain at risk.
The survey found that 70% of young people across the UK believe career opportunities are better in London than elsewhere, with just 11% saying they are better outside it. Yet 58% of those pursuing a career outside the capital believe London is too expensive to live or work in. Outside London, 28% of young people surveyed already own a suitable home; in London the figure is 13%.
LCCI said the gap between young people’s ambition and what they can afford was “deeply concerning” at a time when almost one million young people are not in work or education. The latest ONS figures put the number of 16 to 24 year olds not in education, employment or training at 981,000 in April to June 2026.
Among those already working in London, the capital retains its pull. Some 81% say they are happy working in London, 79% see a clear career benefit from being based there and 82% of young Londoners say career opportunities are better in the capital. But only 60% of young people living in London see their long-term future there. Asked what would attract them to move to the capital, 30% of young people named being able to afford property in the next 10 years, ahead of better pay on 25% and a job in their field on 20%.
The findings land as the capital’s housing pipeline stalls, with London building just 7% of the homes it needed last year, and as recruiters forecast that up to 90,000 professional jobs will move out of London to the regions by 2031 because of the cost of operating in the capital.
LCCI argues the whole country has a stake in London’s ability to attract investment. The capital accounts for nearly a quarter of UK economic output and a third of its corporation tax, and London and the south east pay 45% of England’s income tax, the chamber said. London ran a £43.6 billion net fiscal surplus in 2022/23, the latest year for which ONS regional public finance figures are available, meaning the city generates tens of billions of pounds more in tax than is spent on it.
The chamber said the Budget, the devolution white paper and the Prime Minister’s 10 Year Plan for Britain should be used to increase London’s international competitiveness, and warned that using those moments to make the capital less attractive to international businesses would damage the country’s growth prospects.
Its Choose LDN campaign calls on the government to reverse the previous Chancellor’s increase in employer National Insurance contributions, secure a “pragmatic new deal” with the EU, cut the cost of the planning system and support first-time buyers, restore VAT-free shopping for international tourists and reverse changes to the non-dom regime.
It also wants King’s Cross designated as an AI Investment Zone, airport expansion at Heathrow, Gatwick and Luton funded by private investment, and backing for the Bakerloo line extension, the DLR extension to Thamesmead and a restart of work on Crossrail 2. LCCI said the Elizabeth line, which it values at £42 billion to the UK economy and which was funded through a mix of public and private investment, should be the model for future infrastructure projects.
Karim Fatehi OBE, chief executive of LCCI, said: “Thriving economies treat the success of their capital cities as national policy issues and build a consensus around their capital succeeding, whether you live there or not. If the Prime Minister is to meet his promise to deliver growth in every postcode, we must now do the same for London.”
He added: “We know the investment London misses out on does not go to another UK town or city, it moves to Paris, Frankfurt, Dubai or Singapore. Our rivals are not our fellow towns and cities. Our rivals are capital cities across the world. Whether you live in London or Leeds, Leicester or Liverpool, the success of our capital matters for jobs and funding for public services in every single part of the country.”
Julia Onslow-Cole, chair of LCCI, said the campaign was “positive, ambitious and timely” and added: “Making our capital city as attractive as possible for investment, job creation and growth helps to deliver prosperity across the whole country.”
Professor Michael Mainelli, president of LCCI and Lord Mayor of London in 2023 to 2024, said: “London’s success is not a London issue; it is a UK, even global, issue.”
He added: “Our international rivals are not standing still, and neither can we. If we make London the most attractive city in the world to do business, the benefits will reach far beyond the capital. When the world chooses London, the whole country succeeds.”
