I've never lived in London. As a copywriter, whilst the vast majority of my clients and peers choose to nestle in the belly of the beast and suckle from its wealthy teat, I simply don't have the stomach for it. I'm a country bumpkin at heart. Not only that, but most of my friends who do live in London have practically no social life outside of work, because they simply can't afford to do anything else. This is obviously a consideration made by South Korean tech giant Samsung, who recently decided to snub London in favour of housing its European headquarter in Berlin due to its lower cost of living. Indeed, the company has boldly claimed that the British capital is simply “not a fun place to live unless you are really rich?”
Do they have a point? The average house price in London recently rose to an astonishing £500,000, with the average rental cost for a one bedroom flat outside the city centre settling just south of £1,200 a month. Add to that monthly transport costs of around £132, elevated utility rates and heightened general living costs and it's surely no wonder Samsung are considering a city where rent is (on average) just £490 a month.
Felix Petersen, the managing director of Samsung for Europe, explains: “In Berlin, you can do stuff without much money. You can bike around or sit in the park. There are uncommercialised zones. You can experiment and play around with technology in a more relaxed environment. In London, the cost of living, the cost of getting around and the infrastructure mean it's not a fun place to live unless you are really rich, especially for young people. London is also a virtually impossible place to live if you want to have children.”
However, City Hall and numerous businesses have immediately struck back with claims that London and its tech industry is still a desirable place to live and work. A spokeswoman for Mayor Sadiq Khan insisted that London is “one of the best cities in the world in which to do business.” She added: “London is Europe’s largest tech hub and is open to talent, entrepreneurs and innovation from all over the world. Some of the world’s biggest companies are proud to call London their home and have made a commitment to the city. In the past year alone, Apple, Google and Facebook have pledged long-term investment into London, saying that the capital is leading place for technology and innovation.” However, the Mayor’s office did concede that cost of living in London is “a problem.” No shit.
"In London, the cost of living, getting around and the infrastructure mean it's not a fun place unless you're rich"
Samsung are not the only ones shunning London in these times of great economic instability. There are also rumours that Channel 4 plans to move out of London, with Birmingham, Leeds and Manchester all tipped as potential new homes for the broadcaster. The officially company line is that they feel there is “a great deal of talent outside of London and too much of it is being overlooked.” This is true, of course, but methinks there is a shred of truth to that statement, but it's far from the whole picture. As Chris Hirst, chief executive of Havas UK and Europe, points out, the creative industries are important because their “cultural impact” goes beyond simple economic and political benefits. As he puts it: “The more we can diversify away from London and help unlock the potential, the better it will be for all of us.” He is, however, obviously referring to industries moving elsewhere in the UK, not to Germany.
Of course, London is not alone in its status as a city too rich for the blood of its own inhabitants. In fact, London doesn't even hit the top 10 when it comes to the most expensive places to live, with property prices and living costs in New York, Paris, Tokyo, Geneva, Hong Kong, Singapore and Copenhagen all being comparable. San Francisco is also a notoriously 'not fun' place to live for its silicon valley workers, who often can't afford to live within commutable distance of their places of work. London, however, finds itself in a rather unique situation right now, and that's largely because of “you know what.” Yes. It's a little bit about Brexit.
In addition to the cost factor, London is battling to retain talent and industry following the UK’s vote last year to leave the European Union. A number of major banks are considering shifting parts of their operations away from the capital in order to be able to retain crucial passporting rights and provide clients with a seamless service after Brexit. Speaking at a conference in Paris, JPMorgan boss Jamie Dimon said that he was on track to move “several hundred” of their 16,000 UK jobs to the EU after Brexit, while HSBC chief executive Stuart Gulliver said that the company might move 1,000 jobs from Britain to Paris in the event of a hard Brexit.
In the tech sector, however, so far London appears to have largely retained its appeal for investors. According to figures published by the Mayor of London’s promotional agency, London & Partners, last week, venture capital firms pumped more than £1.1bn into the city’s technology sector in the last six months alone. The report also showed that London’s tech sector attracted more venture capital investment over that period than any other European city since the Brexit vote, including Dublin, Paris and Amsterdam. Also Berlin.
“The more we can diversify away from London and help unlock the potential, the better it will be for all of us”
So, as ever, there are two sides to every story, but the fact remains that, whilst there are still many reasons for the creative and tech industries to stay put in London, there are just as many, if not more reasons to venture elsewhere and test the fresh waters either up north or across the sea. Do you agree? Do you think that major brands relocating to other regions will help stimulate talent diversity and inspire innovation? Or, as the majority of media, ad and tech agencies are London-based, do you feel that moving away from the capital would impact a company's ability to collaborate and innovate with their peers and their clients? Please feel free to wax lyrical in the comments below.
Benjamin Hiorns is a freelance writer and musician from Kidderminster in the UK. His opinions are his and his alone.