Hi Greg,
I admit I am commenting from the perspective of employment in the utility and heavy industrial sector; I'm long out of touch with manufacturing.
In my sector we outsource a lot of work to small one-man-band consulting companies, guys who are of retirement age but are supplementing their pensions by continuing to work or who simply enjoy their work enough that they choose to work beyond retirement. Once that work would have been done in-house but today we lack the technical expertise to take it back in-house and it isn't causing a problem right now because the consultants will always be there, won't they? The small consultants have no incentive to pass on their knowledge, and indeed it would work against them. This consultant-based business model isn't sustainable in the long term and that is part of the reason why I think things will get worse before they get better.
Don't assume that house prices in the south-east are representative of the nicer part of the UK further north - you can certainly get a nice house up here on £80k a year, whereas it wouldn't go very far in Surrey or Kent. Not much I can do about the weather though. ;-)