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London's housing shortage is driving graduates and low-paid workers to move further from the capital, prompting fears of an imminent jobs crisis as businesses struggle to recruit entry-level labour. It now costs ?2,583 a month to rent property in central London, according to Countrywide, and the cost of renting a one-bedroom flat in Greater London is now 22pc more than it was five years ago, according to the Valuation Office Agency.

We are going the way of San Fancisco where the well-off people are served by low-income workers who have to travel for miles to do so." "Graduates looking to move to London to start their career are being more and more put off by high rents caused by the housing shortage," added Felix Mitchell, founder of Instant Impact, a graduate recruitment company, which places workers with start-ups. Even the introduction of a national living wage is unlikely to have an impact on the issue, the CBI said, as even the lowest wage decile in London is ahead of the national figure.

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