Tech-related firms are set to overtake financial services and insurance as London’s biggest employer for the first time in 2018, helping to drive residential rental values as more workers search for a place to live in the capital.
According to research released by Savills yesterday, an extra 368,000 people will be working in London in five years’ time, with a quarter accounted for by tech firms setting up camp in areas such as King’s Cross.
An improving UK jobs market is in turn expected to boost rental demand, with the property consultancy firm forecasting rents to rise a total of 20.4 per cent over the five years to 2018.
Savills’ report, which looks at companies relocating to the capital, found that half of all tenants of prime property are renting after being relocated to London by their companies.
However only 39 per cent of tenants are now from the financial services industry, compared with 50 per cent in 2007, before the financial crisis.
Instead employees from technology, telecommunications, media and advertising firms have taken their place. The number of tech industry employees, for example, has jumped by 19 per cent from 2007 to 2013, outstripping a six per cent rise in finance and insurance.
Highbury and Islington is the most popular spot for tech industry workers to rent because of its proximity to Old Street, where these firms have traditionally been based.
However, financial services employees prefer living in prime central London locations such as Chelsea or Wapping, which is near to the City and Canary Wharf.
“As the tech industry continues to expand, this extension in popular locations will continue and the demand for rental properties suitable for corporate relocation tenants will increase,” Savills research analyst Sophie Chick said.