Analysis: Can't afford a house on £33,000

Sky-high London housing costs are blighting lecturer recruitment. Universities are calling for more state help.

University lecturers in London face low pay, crippling transport costs and the prospect of never being able to buy a house.

As pay fails to keep pace with the escalating cost of living in the city, London's higher education institutions will find it harder and harder to recruit and keep staff.

It will be one of the issues addressed at a conference in London next week hosted by Ken Livingstone, the mayor of London, on higher and further education.

The government has recognised the scale of the problem facing the public sector and has responded with a variety of initiatives and proposals to help nurses, teachers, firefighters and police.

Ideas include interest-free loans acting as "top-up mortgages", and converting old hospital property into cheap flats for nurses. But lecturers, who are facing exactly the same problems - some would say worse, because they commonly start their careers deep in debt - are rarely, if ever, mentioned.

When unions ask academics across the country which key improvements they would like to see in their working lives, conditions and workloads are their prime concern. For Londoners, pay is much more pressing.

Jenny Golden of Natfhe, the lecturers' union, said the fact that a senior lecturer at the top of the pay scale in the capital would earn only £32,8 is a major disincentive to pursuing a career there.

Throughout the country, lecturers are not well off compared with other professionals, but in London the differential stands in stark relief.

Average earnings for non-manual employees in Great Britain at April 2000 were £24,421 and in London £31,862, according to government statistics.

An academic at the top (point 14) of the lecturer scale or at the bottom (point 0) of the senior lecturer scale outside London earns £24,011 - almost exactly the national average. With the inner London weighting of £2,191, a lecturer on point 14 earns £26,202 - only 82 per cent of the average salary for London.

In central London, an academic needs to be a senior lecturer on point seven, earning £31,999, to exceed the city's average non-manual salary.

London weighting needs urgent reappraisal, says Peter Mitchell, the Association of University Teachers assistant general secretary for the London region. For staff in pre-92 institutions it has been frozen since 1992.

"This has seriously eroded the real value of earnings in London," said Mr Mitchell. The inner London figure of £2,191 for academics even compares badly with public sector workers: £2,316 for teachers; £2,724 for the police; £2,955 for nurses.

Housing is the area where low pay hits hardest.

According to the Halifax building society house price index published last month, the average house price in London was £153,881, compared with £82,128 in the West Midlands, £62,619 in the Northwest and £55,089 in the North. It was 79 per cent greater than the national average of £86,196 (see table).

The Halifax normally lends up to 3.25 times annual income for mortgages. Given a 5 per cent deposit, this implies that to buy the average British house you need an income of just over £25,000, or point two on the senior lecturer scale. To buy the average house in London, you would need an income of nearly £45,000 - far higher than even the most highly paid principal lecturer.

The situation is particularly hard for young lecturers on starting salaries of not much more than £20,000. "After many years of study, to find yourself on that starting salary, and quite likely with considerable debts, is a pretty daunting prospect," said Mr Mitchell.

Renting is not a much better option.

The Department of the Environment, Transport and the Regions found in its Survey of English Housing that in the period 1998-2000, the average private rent in London was £148 a week, compared with £76 in the Northwest, £64 in the West Midlands and £55 in the Northeast (see table).

Many London lecturers are forced to live in the suburbs, facing them with more than an hour's journey to work. And the further out you live, the more it costs you to get to work.

A travelcard covering all transport to the outskirts of the capital costs £1,456 a year, £756 for the inner zone. Comparable all-zones prices for other cities are £685 for Manchester, £645 for Birmingham and £500 for Newcastle.

The worry for London's higher education institutions is whether they will continue to attract enough lecturers.

Roderick Floud, provost of London Guildhall University, said: "We are certainly finding that it is now very difficult even at senior level to attract people from other parts of the country - the prospect of moving to London is a severe disincentive to applications."

He added: "What I think is very worrying is, given that London house prices are continuing to move ahead of the rest of the country, whether we will in the future be able to recruit people at a junior level."

Ms Golden agreed: "This problem at the lower end of the scale will mean that the age profile of lecturers in London is bound to get older and there is ultimately going to be a shortage of lecturers across the board."

At Queen Mary, University of London, Laurie Cuthbert said his electronic engineering department had been successful at recruiting through head-hunting, but the most recent press advert it placed attracted no appointable applicants. "It is a really significant problem," he said.

Paul Hogg, head of the materials department, said: "Being in London makes it incredibly hard. When we try to recruit people from other parts of the country, the only reason we can get good people is that our department has such a vibrant atmosphere."

Barbara McGilchrist, dean of initial teacher education at the Institute of Education, has a different problem. One route for people to become tutors on PGCE courses at the institute is to come from teaching. But a senior teacher could earn far more in a school. "Opening up these sorts of routes for people who might want to change career entails a financial sacrifice for them," she said.

According to the National Union of Teachers, a school head of department would earn £29,109 - or £31,425 with London weighting. "If they wanted to join us, they would come in on the lecturer's scale," said Dr McGilchrist.

Even if they were appointed at the very top of the lecturer scale - with London weighting, £,033 - they would have to take a pay cut of £4,392.

Just before Christmas, members of the London Higher Education Consortium had a meeting with John Ross, Ken Livingstone's chief economic adviser, to discuss the cost of housing.

Professor Floud said: "We were arguing that university teachers were as much in need of affordable housing as the more normal categories mentioned in this connection. This extended to graduate students, postdoctoral fellows and other research workers. There is a severe danger that these people at the start of their careers will be locked out of the housing market and will never be able to be employed in London HE institutions.

"We are looking for innovative solutions, probably the things that have been talked of in the context of other groups, such as subsidised mortgages."

Mr Mitchell said: "There has been some discussion about the government introducing subsidies or interest-free loans to enable key groups of staff in London to live somewhere near their work. There was a suggestion that academic staff were to be included in the scheme. It is probably not likely to happen, although the situation is potentially equally serious."

One of the worrying aspects of the situation is the scale of the contribution London makes to the academic life of Britain. Professor Floud puts it at 25-30 per cent of higher education in England.

And it is not just London's importance to higher education, but also higher education's importance to London. Professor Floud added: "Higher education is a very important part of the London economy, about 4 to 5 per cent, and unless one ensures a reasonable supply of people going into the labour force - and this applies to graduate students as well - one risks damaging a major London industry."

* All figures, except where otherwise stated, refer to pay scales for new universities.

A TALE OF TWO CITIES

Leeds

Russell Goulbourne 26, lecturer, department of French, University of Leeds.

Salary: £18,731 Home: recently bought a two-bedroom flat in a Georgian listed building for £39,000. He pays £250 a month mortgage

Transport: Annual bus pass at £400 a year. Ten-minute bus ride to the city centre

Mr Goulbourne graduated from Keble College, Oxford, with a degree in French and German in 1996. He completed a master of studies degree followed by a DPhil, which he finished in June 2000. He started teaching in Leeds in September.

"I had decided that I wanted to buy a flat before I moved to Leeds, as I knew the prices would be affordable," said Mr Goulbourne. He also applied for a job in London. "I would have gone anywhere the job was but at the time when I was being interviewed, I started thinking 'how would it work?' I thought I might have to commute from Oxford, because I didn't really see how I could manage to find somewhere agreeable to live in London starting out on a lecturer's salary."

The downside is that Mr Goulbourne did not have a ready-made social life in Leeds. "It has been difficult getting to know people outside the university. I suppose if you go to London you already know people, and perhaps there are more opportunities to meet people."

But he says socialising in Leeds is cheaper than in the South.

Mr Goulbourne believes he made the right decision. "I'm happy at Leeds, and I think things could have been more difficult."

London

Paul Curley, 37, lecturer, department of biotechnology, University of Westminster Salary: About £,000

Home: shares a rented two-bedroomed flat in Wembley Park for £425 a month

Transport: Travelcard costs just over £100 a month. Average journey time is 50 minutes each way

Mr Curley graduated from University College Dublin with a degree in biochemistry in 1985. He did his PhD in the same department, completing it in 1989, then continued his research work in Dublin. Most recently, he spent three and a half years doing post-doctoral research at the Wellcome Trust Centre at the University of Manchester. He joined Westminster in September 2000.

He would like to buy a home. "I will probably have to look at places 15 to 20 miles out of central London."

When he took the job at Westminster, Mr Curley knew that it would be difficult financially, despite the fact that it meant a pay increase. "I knew that I wouldn't have as much money," he said. "We get London weighting, but it by no means covers the extra costs."

But he is not regretting his decision. "For me, this was the right move," he said. "In London, everything you could want is within reach - there is so much expertise."