Why does this rent argument not apply to SF/Silicon Valley? I think SF is more expensive than London, though typical pay in (non-startup) tech is higher.
Because it's not just "higher" - it's so much higher it's hard to comprehend what difference that makes to opportunities young people have. I finished my BSc and MSc in Computer Science from a prestigious Russel Group university 10 years ago, got hired as a C++ programmer for a big corporation.....making £18k a year. My take home was about £1200/month if I remember correctly, which was still ok-ish because I was sharing a flat with some people so I only paid like £150/month towards the rent. I was only able to save a very modest amount of money and it took me years to work up to what you'd consider a "decent" salary.
From what I understand, in US your costs are of course higher in terms of rent, healthcare, etc, but the difference in salary is so huge you can actually save up some capital if you want to try starting your own business in few years time.
£18k/year as a junior programmer in London in 2014? I was underpaid as a junior at £16k/year in London (fintech) in 2004, and we were paying junior developers in the high twenties in 2015 in the public sector. You were definitely being seriously underpaid.
I was earning 35k in Nottingham as a C++ programmer with 3 years' experience in around... 2006 or so. Most of my programmer friends were in roughly the same pay scales. Programmer salaries in the UK aren't usually that low.
Not sure, as I don't live in SF, but I know that not all start-ups are in SF/The Valley even if the VC money is raised there.
In the UK, they're disproportionately concentrated in London. In fact the UK government has encouraged many of them to set up around Old Street / 'Silicon Roundabout' (sigh). That area is only accessible by public transport, whereas SF/California is accessible via cars, so the choice of where you live is considerably greater in the US. The vast majority of people that work in London live within 10 miles of the absolute centre of London and use public transport. The magic '1 hr commute', if you will. Hence the rental prices.
Our government is continuing the prosperity of London at the cost of the rest of the country. If you remove London from the UK, we're poorer than Mississippi: https://archive.is/UJZBP
It’s not clear at all that the vast majority of people in London commute by public transport. The sources linked below, one during the pandemic in 2020, and the other a series of estimates, suggest the figure is more like 25-35% but I wasn’t able to find something more conclusive. [1, 2]
More to your point, I agree that SF or at least the Bay Area has a higher dependence on cars, but it’s also more geographically constrained by the bay and resulting bridges/ferries, so it’s not obvious that there’s much more freedom in where to live in practice. For instance, I would guess a one hour commute in London would encompass a similar or greater number of housing units than in the Bay Area.
Somewhat unrelated, but London seems relatively low in public transport usage compared to virtually every large continental European city [3], which at least anecdotally tend to have much cheaper transport (particularly for monthly/annual subscriptions for commuters) and/or somewhat less car-friendly infrastructure. Riding a bus through Old Street, for instance, makes apparent one cost Londoners pay for not prioritising public transport.
I was replying regarding why London rent is high in general. SF/The Bay seems to be disproportionately tech-based jobs. London is a more generic mixture, including finance, arts, entertainment, services, insurance, tourism and so on.
Though specifically tech: offices are in central London - Google at King's Cross, Apple at Battersea, Facebook near Oxford St. Old Street and Hoxton for start ups. And of course fin/fintech in the City, Canary Wharf, and the West End. That's 10s of thousands (if not 100s) of developers concentrated in around London.
Microsoft in Reading 20 miles outside London is a bit of an outlier.
No one drives to any of those jobs. And the talent pool for those jobs is centred around London and London transport.
And then if you want to raise VC you need to get into the City or Canary Wharf for meetings - they won't go to you as you need their money. And then they'll be interested in 'where are you set up, and where will you get your talent from and grow?' - I can't recall any significant tech company that's inside the M25 and not in Central London.
The "Microsoft UK in Reading" equivalent towns in any other direction than the M4 would be something like Maidstone (Kent, SE), Bishop's Stortford (NE), Milton Keynes (NW), Crawley (S). None of those have any significant tech companies. Weirdly, Guildford (SW) does have a tech scene partly because some gaming companies set up there in the 1980s and 90s.
