These tales will be familiar to older millennials and Gen Xers who navigated the start of their careers in London in the early 2000s, as in other major cities like New York and Dublin.

What’s changed in the past few years, though, is the economic context in which Londoners are forced to deal with that rite of passage.

The London tax

Working in a major city can be trying at the best of times. Millennials and Gen Z will likely sacrifice disposable income to develop their career and build their cultural capital, hoping the early money problems will take care of themselves.

However, the promise of achieving higher wages in London isn’t necessarily true anymore, either. 

Since the financial crash of 2007–08, wages have grown slower in London than the U.K. average, but costs have risen faster, adding to the squeeze.

Full-time workers in London make an average of £44,370 ($57,027) a year, according to Office for National Statistics data. As rents have risen faster than salaries, it’s become increasingly common for workers to spend more than half their post-tax wage on rent, well above the generally recommended 33%.

Landlords have been increasing rents by 20% or 30% in some cases, leaving current tenants with little choice but to look elsewhere. There isn’t currently legislation in place to prevent these sharp rises.

According to data from SpareRoom, the average room in London now sets a tenant back £983 ($1,270) per month.

“There aren’t really any affordable pockets of London left,” Matt Hutchinson, SpareRoom’s communications director, told Fortune. 

Hutchinson says the average age of people using SpareRoom, which primarily connects renters to available rooms in shared housing, is rising, and people are sharing longer into their lives. 

When the group first launched online, it was catering to young professionals getting their first flat out of university. 

Now, however, it’s common for older demographics going through major life changes, like coming out of a breakup or moving to London for a mid-career job, to share for the first time in their lives.

Low supply is driving affordability issues. Across the U.K., homes are being let eight days faster than they were pre-pandemic, according to Savills research. The real estate group says there are 30% fewer homes to rent in the U.K. than in 2018–19.

Poor conditions

In addition to an affordability problem, the conditions those renters have to live in are getting worse as well.

Across England, private rental homes were twice as likely as the average to have a problem with damp, according to the English Housing Survey.

A study last year by think tank Resolution Foundation found that people living in London were twice as likely as people living elsewhere in the U.K. to experience poor-quality housing. 

Those living in poor housing were accordingly twice as likely to experience poor health, either physical or mental.

Cara Pacitti, a senior economist at the Resolution Foundation, suggests there has been an increase in instances of damp since the cost of living crisis, when rising energy prices forced people to cut back on heating in the winter.

Many tenants avoid complaining about their conditions because they fear eviction and being forced to look for more expensive accommodation.

Polly Neate, chief executive of housing charity Shelter, has also seen this trend.

“We regularly hear from young renters in London who feel powerless to complain about conditions or challenge an unfair rent hike because they know they could be slapped with a no-fault eviction the moment they do,” Neate told Fortune.

Impact on the economy

SpareRoom’s Hutchinson often wonders at what point London becomes “a theme park for rich people and tourists,” but concedes he didn’t expect things to get as bad as they have without that occurring.

However, in the past year, the scale of the affordability problem has caused some people to put off life decisions.

Research by the rental service in February last year found that seven in 10 renters had postponed plans to move house in the prior 18 months, with budgetary issues the main drawback.

“People are turning down job opportunities, not because they don’t want to move but because they don’t want to get into the market the way it is now, and so people are just staying put who don’t really want to,” said Hutchinson.

“That’s really worrying for them on a personal level, but also, if we intend to get out of the mess we’re in by growing the economy, people being able to move for those jobs is really important.”

According to data compiled by Savills, more private investment is flowing into the build-to-rent market, which should relax supply issues over time.

Shelter’s Neate has urged new legislation that stops no-fault evictions and limits rent hikes to one per year.

Detractors argue that this could exacerbate supply issues, but as young workers become more disenchanted with the city, few answers remain.

“If you are disincentivizing people from moving to better jobs, more productive jobs, in high productivity areas, that’s obviously not great for your economy,” says the Resolution Foundation’s Pacitti.

London’s loss is the rest of the U.K.’s gain. The country’s leveling up agenda sought to spread the wealth outside the capital, and new opportunities are beginning to crop up in second cities like Manchester and Birmingham. 

That takes time, though, and while other regions catch up, a flight of talent from the country’s largest economy could hit the U.K. hard.