Yahoo Finance City comment: Write off London at your peril — just look at rents
Is London lagging?
The Centre for Cities says today that the great “return to office” rush has been more of a trickle than a flood. Footfall — a measure of the number of people visiting — is still at just 44% of pre-Covid levels in central London on a weekday. That is lower than in other cities.
The figure reflects changes in the way people are working and London’s strong bias to knowledge economy jobs that can be done remotely. People are coming in to the office less often.
There are concerns about what this could mean for city center businesses, particularly in areas like the Square Mile. There is no doubt that sandwich shops and hairdressers in places like this are hurting.
But footfall is just one measure — London’s economy is still whirring.
Take the housing market: estate agents are reporting a pick-up in demand as pandemic exiles bored with the countryside “boomerang” back to London. Rents are starting to pick up as two year’s worth of young professionals move to the capital. RICS today says it has seen “a significant turnaround,” with rents in the capital now growing at around 2%.
I know from first-hand experience — we are house-hunting after being turfed out of our flat. Rents are far higher than they were this time last year and competition is fierce. Bidding well above the asking price is the norm, a far cry from negotiating down rents during the pandemic.
Newcomers to London might be visiting the center less often than previous generations, but they will still spend their money here. The economy might be reshaped but it won’t be knocked back.
Write off London at your peril.
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