Why London is So Expensive: An Exploration of the Cost of Living from a Service Perspective and Is it Connection to the Residential Market?
London, a cultural and economic powerhouse, is infamous for its sky-high living costs. Rising expenses in both commercial and residential markets, driven by exorbitant business rates, steep rents, and the monopolization of property ownership, play significant roles. Let’s explore the underlying reasons, focusing on how commercial sector dynamics influence the residential market and overall cost of living.
The Interplay Between Business Rates, Commercial Rents, and Residential Costs
High business rates and ever-increasing commercial rents directly drive London’s unaffordable lifestyle. Business rates are pegged to estimated rental values, creating a vicious cycle in which rising rents lead to higher rates, and businesses must hike service costs to stay afloat. It’s a relentless squeeze.
According to the Federation of Small Businesses (FSB), many small enterprises list business rates as their second-biggest financial burden, just behind rent. Imagine this: in 2020, the average business rates bill for a small London business was a staggering £15,000 annually, with prime locations like the West End surpassing…
