Samsung’s Next technology fund has announced it intends to open shop in Berlin over London because Britain’s capital city is too expensive, and “not a fun place to live unless you are really rich.”
In an interview with The Times, Felix Petersen, the managing director of Samsung’s $150 million technology fund, announced it chose Berlin over London, saying:
“In London, the cost of living, the cost of getting around and the infrastructure mean it’s not a fun place to live unless you are really rich, especially for young people.”
Petersen said the city no longer had any reasonably priced neighborhoods, adding that it’s “increasingly hard for people to build companies,” as well as start a family.
Berlin, on the other hand, is much more affordable, allowing companies to “do stuff without much money.”
While the cost of housing has long soared across the UK, London in particular is a macrocosm of unaffordability. According to the Office of National Statistics, the average house price across the UK in April was £220,000, but in the capital, this soared to roughly £483,000.
It’s hard to attribute this to a single reason. Demand plays a huge part, as capital cities are always more expensive (and desirable) than smaller regional towns. The UK is also failing to build enough houses, in part due to the practice of landbanking, but also because there simply isn’t enough builders.
As is also the case with many Canadian cities like Vancouver, the rise in London’s house prices has attracted foreign investors from Asia, the Middle East, and Russia, who have bought properties as an investment, but have left them abandoned to rot.
The end result is that in London, it’s not uncommon to see people in their late 20’s, 30’s and early 40’s living in flatshares, or even with their parents. Those that do find their own space to rent or buy often do so outside of London, in places like Essex, Milton Keynes, Watford, and Brighton. Inevitably, they face hellish commutes and steep travel costs.
London’s high cost of living has also had a disastrous impact on its nightlife. In just five years, 50-percent of all nightclubs across London’s 33 boroughs have closed their doors. A similar drop in pubs and comedy clubs has also been observed.
A quick glance at the Berlin Craigslist page shows all-inclusive, fully-furnished studio apartments available for just €500 per month. According to Glassdoor, the average salary for a software engineer in Berlin is roughly €51,225.
Meanwhile, a glance through Zoopla shows studio apartments in London ranging from anywhere between £1,000 in Hendon to £2,200 in affluent Charing Cross. While most of the apartments I saw were furnished, almost all didn’t include bills. The average salary of a software engineer in London is £41,700, according to Glassdoor.
With all that in mind, it makes sense that Samsung Next chose Berlin over London.