London has the strongest human capital score of any city in the world, according to Oxford Economics. It also has one of the highest housing burdens among the leading global cities.
The consultancy's 2026 Global Cities Index gives London a maximum score of 100 for human capital, which measures areas including skills, university quality, the size of the labour force and the ability to attract and retain talent. London ranks seventh for Economics.
Housing pulls in the other direction. Oxford Economics estimates that residents of London, Vancouver and Auckland spend around 30 per cent of their disposable income on housing and utilities. The average among the index's top 100 cities is about 20 per cent.
London ranks second overall among the 1,000 cities assessed, behind New York and ahead of Paris, and has held that position in every edition since Oxford Economics launched the index in 2024. Its category scores, however, show sharply different strengths and weaknesses.
London's strongest asset is its people
Oxford Economics scores cities across five categories: Economics, human capital, Quality of Life, Environment and Governance. Its forecasts are included alongside current and historic data, so the index attempts to assess future prospects as well as present conditions.
London's strongest performance is in human capital.
The category considers educational attainment, labour force size and growth, university quality, employment rates, skills and the ability to attract and retain talent. Oxford Economics attributes London's first-place position to its universities, concentration of corporate headquarters and highly qualified workforce.
That gives London an advantage over the two cities immediately around it in the overall ranking. New York scores 89.5 for human capital and Paris 84, compared with London's 100.
The labour market is also one of the reasons Oxford Economics gives for London and New York remaining at the top of the overall index. It argues that the leading cities have proved resilient because their existing advantages continue to attract skilled workers and businesses.
London's performance is therefore based on more than the presence of several leading universities. Its advantage comes from the combination of education, skills and the depth of the labour market those institutions feed into.
Economic scale still matters
London does not lead the Economics category. Its score of 86.5 places it seventh, while New York scores 100.
But its scale remains difficult for European competitors to match. Oxford Economics describes London as Europe's leading economic centre and says it has the world's fourth-largest city economy by GDP.
The Economics category also takes account of growth, stability, GDP per person, employment growth and economic diversity rather than simply measuring the size of the economy.
London has also moved from eighth in the Economics category in the 2025 index to seventh this year. In 2025, it scored 83.6 for Economics and 100 for human capital while retaining second place overall.
Paris provides a different comparison. It ranks third overall this year with a score of 93.4, against London's 98.8. Its Economics score is 81 and its human capital score 84, both below London's.
Paris performs much better on Quality of Life. It scores 88.1 against London's 77.
The category scores show how different the cities' profiles are. London remains ahead of Paris overall despite its lower Quality of Life score, because the index combines several measures and London scores strongly for economic scale and human capital.
The index should therefore be read as a model of cities' relative strengths and weaknesses rather than a simple judgement about which is the best place to live.
Housing is a pressure on quality of life
Quality of Life covers income, inequality, life expectancy, crime, access to cultural and recreational facilities and housing expenditure. Oxford Economics says these factors can affect migration and cities' ability to retain talent.
Housing is one pressure within London's Quality of Life score.
Oxford Economics estimates that households in the top 100 cities spend an average of 20 per cent of disposable income on housing and utilities. London sits at the upper end at around 30 per cent, alongside Vancouver and Auckland.
It attributes high housing burdens in expensive cities to strong demand and insufficient supply pushing rents and house prices higher relative to incomes.
The Greater London Authority's own figures show how far housing supply remains from the level envisaged in the London Plan.
London recorded 33,989 net housing completions in 2023-24 against an annual target of 52,287, a shortfall of 18,298. Completions were down from 38,992 in 2021-22 and 37,235 in 2022-23. The Greater London Authority said its housing supply key performance indicator had not been met.
The 52,287 target annualises the borough housing completion targets based on assessments of land availability. The London Plan sets out a wider aim of meeting the need for 66,000 net additional homes a year up to March 2029.
That does not establish that London's housing shortage is already weakening its position in the global economy. Oxford Economics itself expects cities such as London and New York to continue attracting residents because of the depth of their labour markets and the career opportunities they provide.
The contrast is visible in the index itself: London has the highest human capital score in a model that considers cities' ability to attract and retain skilled people, while its housing burden is well above the top-100 average.