London no longer calling

More Australians head home as Britain loses its lustre.

They come expecting a strong pound, cheap European travel and almost certainly miserable weather.

But with the British economy lurching towards recession, Australians living and working in Britain are increasingly finding reasons to return home, where they can ride out the global economic storm, and enjoy a dose of Vitamin D without forking out for a flight to the Costa del Sol.

"We're seeing what I call the boomerang effect," says Paul Gollan, associate fellow at the London School of Economics, and an associate professor in the department of business at Macquarie University.

"Over the last decade or so, Australians in accountancy, consultancy and banking have come to London for opportunity and experience. Now they are re-assessing their position."

Britain's Daily Telegraph recently reported Australian Government figures that show 2600 people had returned home each month since last June, about 1000 more per month than the previous five years.

Another study by a recruitment company registered a 14 per cent drop in Australians searching for jobs in Britain.

The Australians join the Polish, Indian and Nigerian immigrants who are also reportedly fleeing the British capital.

For any Antipodeans thinking longingly of home - and there are an estimated 120,000 Australians in Britain - last week's headlines can only have worsened their nostalgia.

The chief European economist of one of the world's largest investment banks, Michael Hume of Lehman Brothers, said he believed the British economy was already in recession - defined as two or more quarters of economic contraction.

The British Chambers of Commerce admitted recession was a distinct possibility, and newspapers were full of dire warnings of a "bear market", where consumer confidence is low and investors are jittery.

More jobs were cut in the housing sector last week, and there were continued reports of home owners going into negative equity.

One set of statistics showed household disposable income shrank in the first three months of the year, and Prime Minister Gordon Brown has responded to the problem of rising food prices by telling Britons to stop throwing out their leftovers.

Within such a climate, the relatively stable Australian economy, which has enjoyed 16 years of economic growth, looks increasingly attractive.

Gollan says the exposure of Australian banks to the US subprime mortgage crisis is less acute than that of the British banks.

The British bank, Northern Rock, was bailed out by the Government in February after it suffered liquidity problems.

Australia also has a sturdier regulatory structure than Britain, Gollan says. "[In Britain] there is even the risk you won't maintain your employment given the volatility within the London City market."

Chris Adams, a 31-year-old management consultant who works for the London office of an American company, is tossing up whether or not to leave London for his home town of Sydney.
 
Like many Australians, he has always planned on going home eventually, but keeps putting it off. He believes that in the long run, he would be better off financially in Australia.

"The Australian branch of my business has been booming so there has been constant demand for people to work on projects there," he says.

"I'd like to buy a house when I move home and although the Australian property market is expensive, it's still cheaper per square foot than London, currency adjusted. You might only be able to afford an apartment in Sydney but it'll be a slightly nicer, bigger apartment than you'd get here."

Gina Spina, a 29-year-old finance manager, will farewell London in August. The changing economic climates of Britain and Australia have played a role in her decision to go home, accompanied by her partner, also 29.

 "When we first came over here 41/2 years ago it was for career and travel reasons," Spina says. "Now the gap between the opportunities back home and here has narrowed. I won't be worried about my career going backwards.

"The only drawback is the relatively weak pound: "It's a bad time to take money back home with the exchange rate the way it is."

Australians are not the only immigrant group considering flight from Old Blighty - large numbers of Polish immigrants are also homeward bound, according to recent reports.

Since Poland's entry to the European Union in 2004, more than 430,000 Polish nationals have flooded Britain seeking work. Most end up in the capital, often in service and construction industries.

But the decision to leave Britain is still a tough one. Market volatility may be unnerving but London is still an exciting landscape for young Australians.
 
"Here, you have different cultures, lots of bands and sporting events and the travel is just awesome," Adams says.

"In Australia, on the weekends you might watch some sport, have some dinner, go to the beach, drink some beers and it'll be great. But that's what you'll do every weekend."

Published: 13 July 2008