The cost of housing is pricing disadvantaged young graduates out of working in London, according to a report from the Sutton Trust.
Rising rents mean younger people are finding it harder than ever to move to London, the report said, with those who do having to share accommodation and pay a high proportion of their income to a landlord.
The study suggests there is a growing divide between those who can turn to their families for financial help to live in the capital and those who cannot.
Figures published in today’s report shows there are now more graduates (15%) living with their parents than on their own (11%).
Researchers looked at data for the higher education rate of young people in an area and found those from “educationally privileged” neighbourhoods were most likely to be working in London.
Those who grew up in the most disadvantaged parts of the country risk being priced out entirely, missing out on jobs in careers such as the media, law and finance as a result.
The research found just 6% of new graduates moved to London from the most disadvantaged 20% of neighbourhoods, compared with 42% from the most advantaged 20% of areas.
It said candidates in the 2016 mayoral election should consider new housing schemes for young professionals including short-term student-style housing and private rented developments tailored for young professionals.
The report said that since 2001, London’s population has increased by 12%, while the housing stock had increased by only 9%. High housing demand has left many caught in a housing trap, it said, where they were unable to save for a deposit on home.
The number of 25- to 34-year-olds living in shared accommodation in the city has increased by 28% over the past decade and last year, there were only two boroughs – Bexley and Barking and Dagenham – where the average house price was less than than eight times that of the average person’s income.
Sir Peter Lampl, chairman of the Sutton Trust and of the Education Endowment Foundation, said: “So many of our leading jobs are based in London, yet the current housing situation is making it increasingly difficult for graduates from less advantaged homes to move here.
“Our brightest young people deserve the same chances to reach the top of their professions or to be able to turn their talents into businesses whatever their background.”
The problem of unaffordable rents is such that accountancy firm Deloitte recently announced it had set up a new initiative to help its graduate intake into housing in the former Athletes’ Village in the Olympic Park.
Through the scheme new employees can sign up for apartments without having to pay for credit checks or agency fees and will get to weeks’ rent free.
The firm said 5% of its graduate intake in 2014 found the city’s housing costs so prohibitive they had to share a bedroom, while others lived in property where communal living space had been converted into an additional bedroom to make renting affordable.