With Brexit, leaving London means paying less rent in other European cities

Bankers and others who must relocate in the wake of the Brexit vote may miss London, but not its rents. In destinations including Frankfurt, Paris and Dublin, their housing costs could be slashed as much as 60 per cent.

London is currently the least-affordable major city in western Europe, according to the Bloomberg Global City Housing Affordability Index, with average monthly rent and mortgage payments equalling 135 per cent of monthly net income. Prices have been elevated by the concentration of high-paying jobs in finance and wealthy foreign-property hunters.

In Paris, the cost is 84 per cent of average net income. In Dublin and Amsterdam, it is about 70 per cent and in Frankfurt, Zurich and Brussels, it is between 50 per cent and 55 per cent.

The Bloomberg index calculates the affordability of renting a three-bedroom residence or buying a 1,000-square-foot home in city centres and suburbs across 105 global and regional financial centres. Rankings are based on self-reported data, including net salary and mortgage interest rates, compiled by Numbeo.com, an online database of city and country statistics.

For many prospective homeowners, prices in the UK capital have been out of reach. If purchasers allocated half their after-tax income to housing, they would need minimum take-home pay of US$11,764 a month to buy in central London, assuming they put 20 per cent down and have a 30-year fixed-rate loan. 

Using this scenario, a person in Paris could afford a similar flat with take-home pay of at least US$6,050 a month. The minimum in Frankfurt would be US$3,520. Goldman Sachs Group Inc. has said it was expanding its office space in the German city, which is home to the European Central Bank.

Major global financial institutions have already announced they are moving more than 10,000 London-based jobs to other parts of Europe. So far, Frankfurt is the top destination.