More than a quarter of London companies featured in a survey published on recently said they were planning to move part of their operations abroad because of Brexit.

Relocating London operations overseas

The London Business Survey, conducted by the Confederation of British Industry (CBI) and global commercial real estate firm CBRE, found that uncertainty over the UK’s future relationship with Europe remained the top concern among two-thirds of 176 firms questioned, with 27 per cent saying they planned to move some operations overseas.Indeed, five per cent said they were considering moving their entire operation overseas. “Retaining access to the Customs Union and the Single Market is firms’ top priority in Brexit negotiations, followed by guaranteeing European citizens’ right to remain, who are crucial to the capital’s workforce,” said the CBI.

Recruitment concerns in London

Employers in London are also becoming increasingly concerned over their ability to recruit and retain staff because of high price of buying or renting a home in the capital, according to the survey.It found that two-thirds of the companies surveyed reported difficulties in recruiting entry-level staff and 59 per cent were encountering problems attracting mid-level managerial staff. And 22 per cent even reported problems when it came to hiring senior managers.Despite this, 46 per cent of respondents said they planned to increase their head counts this year amid an atmosphere of recovering confidence among business chiefs: nearly a quarter said they felt more optimistic about the economy over the next six months – the highest figure since September 2015.A quarter of companies were more optimistic about their own business prospects over the next six months, with 30 per cent saying they planned to increase investment plans.

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• Brexit offers financial sector ‘economic agility’ – Liam Fox

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London’s housing crisis

The survey found that the high price of London housing was resulting in 44 per cent of firms offering premium salaries to recruit, and hang on to, staff. More than a quarter also said some employees had actually quit their jobs because they could not afford to live in the local area.Eddie Curzon, CBI London director, said, “This survey speaks loud and clear – London’s housing shortage is a ticking time bomb. The potent combination of lack of supply and high prices means businesses themselves are being priced out of the market, as they can’t afford to recruit and retain their workers, from entry-level to senior staff.“And with two-thirds of firms not optimistic the housing market will become more affordable in the next three years, we have a stark challenge on our hands. We’re squarely behind the (London) mayor’s aim to build 66,000 new homes a year, but want to see more clarity on how he will work with local authorities to crucially unlock supply in every borough.“More positively, London’s firms are slowly beginning to look to life beyond Brexit, with optimism in the capital about the economy rising to a level – albeit low – not seen since before the referendum.“To make the most of this, and to ensure London remains a globally attractive place to do business, it is more important than ever that the city’s infrastructure is equally world-beating. From moving quickly ahead with Crossrail 2, to building more cycle routes, there are real opportunities to do so, so we urge City Hall to press ahead with them.”Adam J. Hetherington, CBRE managing director in London, added, “Against a politically noisy backdrop, businesses are taking stock and feeling more optimistic about the year ahead. It is reassuring to see that 61 per cent of businesses are planning to expand over the next 12 months.“Continued growth is vital for London, which remains one of the most sought-after cities for investment. The government must take heed of the key issues such as housing, business rates and infrastructure which are impeding businesses ability for future growth.”

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Find out more about the impact of Brexit on the financial sector in the Spring issue of our magazine 

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For related news and features, visit our Brexit section. Find out more about our upcoming Relocate Awards. Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory 

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