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Small business owners forced to leave London due to spiralling house prices, survey finds

A Federation of Small Businesses survey has revealed the effect of the capital's housing crisis on its members

Cromwell Gardens in South Kensington, where properties often sell above the £2m mark

The Federation of Small Businesses (FSB) has released new data from its 50,000 homes campaign survey showing the extent of the housing crisis in London.

According to the survey, a quarter of small businesses have either moved, or have considered moving, their business out of London as a result of the rising cost of house prices.

It also shows nearly six in 10 (57%) small business employers believe the wellbeing and engagement of employees is the single biggest worry for their business due to London’s housing costs.

Nearly half (47%) of small businesses have taken, or considered taking, at least one action to help their employees with the cost of housing, including measures such as offering loans for rental deposits and mortgage payments, providing accommodation, guaranteeing mortgages for employees and offering employees help to find accommodation.

On the back of the survey, the FSB are campaigning for the new new Deputy Mayors for housing (James Murray), planning (Jules Pipe), transport (Val Shawcross) and business (Rajesh Agrawal) to act to ensure that housing and commercial space are appropriately apportioned to meet the needs of business and employees.

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They also want the establishment of an agreed London-wide definition of affordable housing based on earnings, not market property values, and ensure that two-thirds of all house building in the capital is designated as ‘affordable housing based on earnings’.

Sue Terpilowski OBE, FSB London policy chair, said: "This is not an issue that is going away, this is a crisis that affects every aspect of London life, London business life and particularly employees struggling to retain a foothold in the capital.

"Around 80% of our members say that London housing costs and lack of housing supply will impact on their ability to recruit and retain staff in the future and it is vital that London’s leaders come together to resolve these issues.

"Many of our members are offering greater levels of flexible working and financial and social support to their highly valued employees, however, we must ensure that we do all that we can to make sure that private and public sector staff have an affordable place to live.

"London is suffering and it touches everyone living and working in the city. Alongside affordability and availability of commercial space, it is the most important small business issue facing London and the Mayor.

"We now have in place a lot of overlapping Deputy Mayors with great expertise, but they need to move decisively to ensure the correct make up of future developments to suit the needs of all Londoners."

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