Global city rankings: London shines but appeal ‘hurt’ by cost of housing
London’s ‘quality of life’ score has been dragged down by a housing affordability crisis as workers spend more as a share of their income on housing than residents of “nearly every city in the world”, a new report has found.
The latest Global Cities Index by Oxford Economics found that Londoners’ financial wellbeing was hindered by sky-high housing costs when average incomes are taken into account.
The report’s authors said the main cause of the crisis in housing affordability was a lack of supply, which would take “political willpower and time to overcome”.
The study said the crisis was “hurting” London’s score for quality of life standards.
Overall, the index of global cities collating economic and political indicators put London at number two in a ranking of 1,000 global desinations.
The capital came behind just New York, which also took the top spot in 2025, yet ahead of other cities such as Paris, San Jose and Melbourne.
The ranking takes economics, human capital figures, quality of life indicators, the natural environment and political stability into account.
On human capital, London scored first while it came eighth in the economics category. The report says London “has established itself as a perpetually relevant locale for business, science and technology, education, and the arts” – noting that its strength comes from “the size of the city’s economy (the fourth largest in the world) and the stable
growth it has historically experienced.”
Researchers also noted that “fears that Brexit would lead to a decline of the city as a global financial centre have not been realised.”
“We expect London to continue to attract migrants from all over the world to access its world-class institutions and range of job opportunities. The city is set to remain a top Global City for years to come, potentially fighting New York for the top spot.”
But on the quality of life index, London placed in 144th, far behind Paris, Berlin, Amsterdam and New York. New Yorkers enjoy one of the highest levels of income per person in the world, according to the report, yet also face problems of their own with housing costs.
London falls behind other regions for housing affordability
The average house price in London has shot up by over 23 per cent from around £449,000 in mid-2015 to £554,000 in June this year.
According to Moneyfacts, the ratio between average house prices and net income is higher in London than in any major region across England.
The financial data group found earlier this month that the average home in the capital now accounts for nearly 15 times the average earnings after accounting for stamp duty, national insurance and income tax.
Londoners face double the burden as people in the North West and North East when it comes to getting on the housing ladder.
The issue of housing affordability has grown to become one of the key electoral issues facing the Labour government both on a national and local level.
Housing secretary Angel Rayner told the BBC there was a “slim chance” of Labour hitting a target to build 1.5m new homes by 2030. She added that the key manifesto pledge was a “stretch target”.
Sir Sadiq Khan, the mayor of London, has meanwhile missed his own targets to build thousands of affordable homes in the capital. The Prime Minister announced that London would receive about £6bn of the initial £10bn government cash injection into council housebuilding across the country.