Property Prices, Cost of Living and Migration in London

Introduction

The purpose of the Report

London is one of the most expensive cities in the world and the cost of living in the city is high such that people tend to think it is unaffordable. Many people have migrated from London because of the high cost of living while some other people find it affordable living in the city since it attractive and has the best facilities compared to other cities all over the world. The demand for property is less compared to other cities since the prices are high in London thus people move to cities outside London where property prices are affordable. However immigration has been a problem since the more people immigrate to London, the high the demand for houses which will in turn lead to high housing prices. People argue out that immigration has led to high housing prices since people come to work in London and cause a rise in the house prices. Without the issue of migration, London would not need more houses thus the more the immigrants the more the demand for houses thus indicating the high prices of houses and other properties. Therefore this paper will focus on London discussing its cost of living, price property and migration patterns in the city.

Cost of living in London

London is a unique city with better facilities in terms of entertainment, tourist attraction sites, modern houses, modern means of transport and all other things people would envy in order to live modern high compared to other cities. In 2013 London was said to be the most expensive city in the world since its cost of living was high compared to any other city in the world as shown in the figure 1 (Linneker & Wills, 2016, P.760). The prices of property, food and petrol were high and are still high thus concluding that the cost of living is much high and only few people can afford that.  Living in London and owning a car means that the cost of living will be higher than those who do not own cars since the petrol prices are high (Brown & Murphy, 2016, P. 46). Londoners constantly moan that the rates of accommodation are high since the rent rates are high and thus most people cannot afford the changing prices of rent. For example house rent in a fully furnished house in the city will cost a person approximately $3479 monthly which is high compared to other cities in the world which are a bit cheaper (Linneker & Wills, 2016, P.760). Utilities are expensive in the city making sure that people especially couples’s part with more money than they would have if they did not live in London. In addition petrol prices are high in London with a little of petrol going for $2.02 thus making the Londoners complain much. The prices cost them much money especially for those people who own vehicles since they will part with more money compared to those without cars. Demand for fuel varies in the city since where fuel is demanded more the prices are higher than where the demand is low. This makes prices differ especially in the petrol stations where the prices are cheaper compared to supermarket petrol station prices where the demand is high indicating that the price mechanism used is different (Wills & Linneker, 2014, P.184).

 

 

 

 

 

 

Figure 1

One might expect or think that with the high prices of fuel in London the prices of vehicles is a bit cheaper but this is not the case since the price of vehicles is high too indicating that the cost of living is high. The public transport in the city is quite expensive since the users part with around $199 monthly which is way too expensive compare to other cities in the world (Linneker & Wills, 2016, P.770). This indicates that people regardless of the means of transport used part with huge sums of money in London which is unfortunate and people end up complaining. The prices of food too are high therefore showing that this city is expensive and the cost of living is way too high since nothing is cheap in London. People prefer shopping online since they can save some money rather than shopping in the local supermarkets where the prices are very high. Global companies such as Tesco have come up to ensure customers save some money especially through online shopping so that they can afford to eat the best food available all over the world (Wills & Linneker, 2014, P.184). Price changes with different suppliers thus ensuring that people chose what they want online at cheaper prices compared to shopping at the local stores. Eating in restaurants is quite expensive in London since customers averagely spend over $19 to get a meal (Linneker & Wills, 2016, P.771). This is expensive since other cities offer the same meals at rather cheap prices. Entertainment is expensive too in London since people pay high prices to attend movie buffs and watch the latest movies. Gyms in London are expensive and people pay more to get gym services. Personal products are expensive with stuffs such as deodorant costing more compared to costs in other average cities. The salons and barber shops are not cheap either and people have to bear with the prices since the cost of living in the city is quite high (Limb, 2016, P. 430).

Types of market failures for London property market

Most of the young people in London are unable to afford houses since the price of affording houses is high as shown by the figure below;

 

 

 

 

 

 

 

Figure 2

• High housing prices are useful to some extent since poor standards of houses can result to some problems such as congestion which can in turn increase the rates of crimes and rioting (Adams et al, 2005, P. 123).
• Good houses which are of high quality are expensive since they have positive externalities such as reduced crime rates, minimized pollution and minimized heating bills.
• There is price instability as a result of this market failure in housing (Adams et al, 2005, P. 123). The supply of housing in many cases is inelastic thus changes in the demand have effects on the price changes. Most of the Londoners think that the prices will reduce but currently the prices are just the same.
• The prices of houses have positive impacts on the economy of London and thus reduction in the prices would affect the economy negatively and even cause a recession which would impact negatively on the economy of the world.
• Skilled people might fail to work in London since they cannot afford accommodation because the houses are very expensive. Such skilled people prefer to work in other cities where they can afford accommodation therefore showing that high housing prices denies London the chance of getting skilled people to work and perform well.
• Environmental factors is another market failure since building more houses cause more harm to the environment and denies London the chance of enjoying green and beautiful lands. This market failure is negative since it ensures that more houses are not built thus leading to increase in prices in the older houses.

Comparison between cost of living in London and Sydney

London is known to be an expensive city compared to Sydney which is relatively cheap and affordable yet it is an attractive and beautiful city. Purchasing property or renting in London is expensive since renting a property in the city will cost the customer 40% more compared to Sydney. For instance a one bedroom apartment in London will cost around $3550 compared to a better and comfortable house charged $2418 in Sydney (Brown & Murphy, 2016, P. 46). Buying your own home in London will cost you 150% more compared to buying a good home in Sydney. The government however has ensured that more people purchase houses since it has come up with “help to buy”programs in order to make sure that more people afford homes in the expensive city. Utilities such as electricity, energy, water and taxes are 50% higher in London than they are in Sydney. Climate has made this happen since one is expected to hit their houses more compared in London to people living in Sydney since London is colder. London ensures that Wi-Fi networks are free in almost all places thus people enjoy living more in the city since regardless of the high cost of living, the facilities provided are the best and thus one enjoy living more in London compared to any other city (Brown & Murphy, 2016, P. 46).

Food is more expensive in London compared to Sydney but it differs with the type of food since bread is 30% cheap in London compared to Sydney while milk is 18% more in London compared to Sydney. Chicken and beef prices are way expensive in London compared to Sydney but vegetable prices are cheaper in London compared to Sydney. Restaurants in Sydney are cheaper compared to restaurants in London where prices are 60% more. However bottled water prices in Sydney are more expensive by 10% than they are in London. Public transport in Sydney is 75% less compared to London which shows that travelling in Sydney is cheap (Nazir, 2015, P. 6). Taxis in London are higher than compared to Sydney by 35% while the fuel prices in London are more expensive compare to the prices in Sydney. Thus has made many Londoners prefer to use public transport rather than owning their own cars since it is expensive to own a car in London. Toiletries are cheaper in London since they are expensive in Sydney by 50%. Medication prices in Sydney are a bit cheaper but shampoos are cheaper in London compare to Sydney. Entertainment is rather expensive in London compared to Sydney where one would be charged 25% in London (Nazir, 2015, P. 6). Generally, the cost of living in Sydney is lower compared to London where life is more expensive in London. People would prefer living in Sydney since the life is cheaper and quality services and facilities are offered as shown by the figure below.

 

Figure 3

Recommendation to the UK government

• The UK government should come up with more help programs to ensure most of its citizens are able to afford houses regardless of the city they live in. these programs will ensure the price of houses does not reduce and people can still afford the houses. Building more houses will reduce the demand thus the prices will be lower which will increase the congestion in the cities and in turn increase the level of social problems such as pollution and crimes.
• The UK government should ensure that it cuts the high taxes on houses so that at least few people can afford the houses. Currently very few people afford purchasing houses and even renting houses since the taxes cause the prices of house to shift in an upward manner.
• Abolishing some government policies on energy will lower the cost of energy both in terms of fuel and electricity. Currently the cost of energy is way high and people living in the UK are uncomfortable with the high prices thus the government should ensure it abolishes the energy policies that ensure the energy prices are high.

Conclusion

From the above discussion, conclusions can be drawn that the cost of living the UK is high compared to cost of living in other countries all over the world. London is an expensive city with high standards of living compared to other cities. People even prefer shopping online since they can save some money rather than shopping in the local supermarkets where the prices are very high. Personal products are expensive with stuffs such as deodorant costing more compared to costs in other average cities indicating that living in this city will cost the consumer more money. The government therefore has come up with some policies and programs that will ensure life in the city and in all other cities is cheaper so that people can feel comfortable living in the UK. People believe that living in the UK is expensive than living in other cities in different parts of the world but the government has come up in aid of the people in order to ensure that life becomes more affordable.

References

Adams, D., Watkins, C., & White, M. (2005). Planning, public policy & property markets.           Oxford, UK, Blackwell Pub. http://www.SLQ.eblib.com.au/patron/FullRecord.aspx?p=284192.

Linneker, B, & Wills, J 2016, 'The London living wage and in-work poverty reduction: Impacts   on employers and workers', Environment & Planning C: Government & Policy, 34, 5, pp.      759-776, GreenFILE, EBSCOhost, viewed 25 October 2016.

Nazir, W 2015, 'Other cities offer more than London', Estates Gazette, 888, p. 06, Business          Source Complete, EBSCOhost, viewed 25 October 2016.

Brown, A, & Murphy, A 2016, 'The Expense of Exclusive Living', Forbes, 198, 5, p. 46,   Business Source Complete, EBSCOhost, viewed 25 October 2016.

Wills, J, & Linneker, B 2014, 'In-work poverty and the living wage in the United Kingdom: a      geographical perspective', Transactions Of The Institute Of British Geographers, 39, 2,   pp. 182-194, Academic Search Premier, EBSCOhost, viewed 25 October 2016.

Limb, M 2016, 'Growing housing costs are forcing NHS staff to leave London', BMJ: British       Medical Journal, 352, 8049, p. 435, Academic Search Premier, EBSCOhost, viewed 25      October 2016.