London to Shine
The pandemic interrupted London’s economy and its vitality but this city has a long history of reinvention and renewal . There is much cause for optimism.
If the GLA’s forecasts are accurate, London will emerge from the pandemic with strong economic growth, cleaner air, more cycle paths, walking routes, street improvements and car free areas. Crossrail will open in December 2021, there will continue to be a livelier pavement café culture, a revived arts and entertainment scene and some spectacular temporary installations to draw people back to the city like Marble Arch Hill.
In the second half of 2021 there will be some return of international travel including the business and students sectors as the vaccine rollout gathers pace globally. We already see overseas students returning and expect this to continue in Q3 2021. We expect transaction numbers and pricing to remain strong in the sales and rental markets in the second half of 2021, as the capital’s economy bounces back.
We are confident that rents will return to pre-pandemic levels by the end of 2022 and that the current level of sale prices will attract a new generation of owner occupiers and investors.
Unfortunately, fire safety works will continue to cast a shadow over our markets and restrict the ability to transact for many years to come. This will benefit period conversions, which have lower yearly outgoings. Properties with good outside space will continue to be popular and can be expected to increase in value in the next 12 months.
The new high speed Elizabeth Line (Crossrail) will link Canary Wharf directly to Heathrow airport via new interchanges at Liverpool Street, Farringdon, Tottenham Court Road, Bond Street and Paddington. It will increase capacity and dramatically reduce journey times, so it has already moved house prices around stations along the line.
Flexible working was already gaining in popularity before the pandemic, enabled by technology and promoted by London’s vibrant Tech sector. Now it seems inevitable that office-based work will be a hybrid of office and other locations. While that means some people can move far from the city, it also means many will thrive in a city with more places to work and socialise.
Tech companies have flourished in the pandemic, particularly those that helped to maintain communication between businesses, families and friends. Our markets continue to attract big names. In June, Snapchat announced that it would increase its office space in London at a single office of 114,000 sq ft next to Farringdon Station in Clerkenwell and TikTok has committed to 60,000 sq ft above the new Crossrail Station at Smithfield. Big name tech companies are now spread from Kings Cross, via Clerkenwell to Shoreditch. Old Street roundabout is receiving a much needed facelift that promises to give ‘Silicon Roundabout’ a clearer visual identity.
London’s finance sector has the been the engine that has driven much of its success over the past 30 years and it is now poised to become a major centre for ‘green finance’ and sustainability as well as a wide range of other tech products and services.
The appeal of a London education will outshine the possibility of remote learning. London Universities have reported high rates of enrolment this autumn, picking up the backlog from students who deferred last September.
There is every chance that the economy will have a strong bounce back in 2022 but that is still largely dependent on the control and outcome of coronavirus cases over the winter months, the effect on businesses and London employment trends at the end of the furlough scheme in September. London remains the UK’s economic power house and continues to attract the brightest domestic and international talent to the capital.