Capital Decline: Has London Lost Its Lustre?

The past months under lockdown have led a unique and exploratory experiment in what it means to work from home, or to otherwise spend more time in your home than perhaps you might previously be used to. Whether holding meetings on Zoom or finding time for thought on furlough, the office has become the home and the home has become everything else.

For the space-strapped Londoners eyeing sky-high rents and prospective house prices, the months under lockdown would have been far more ideal had residential and green space not been at a premium. Is it no wonder then that record numbers of Londoners have registered their interest in properties for both sale and rent outside of the capital?

Those of you who frequent my Forbes column my recognize that I have touched on this subject previously. In fact it was only in February, just prior to the coronavirus pandemic taking over the public consciousness that I wrote on how this trend was already an exodus in motion. And only three months later, the changing face of consumer priorities started to come into the light as more and more London and city-based residents looked enviously at their rural neighbours, able to enjoy – or perhaps endure – the months under lockdown in the privacy of their gardens, or with proximity to green pastures to roam through.

Technologies facilitating a move away from cities and office space played a huge factor in this; can you imagine how lockdown and remote working would or indeed could have functioned had the pandemic hit 20 years ago? Back in the 2000 only 25% of U.K. households had internet access.

Nowadays fast broadband and WiFi can make a remote office out of one’s living room or garden, which during this recent heatwave has no doubt been a pleasant reprieve for many who would otherwise have blistered on overcrowded trains into the hearts of our vibrant cities.

But looking at more recent data adds another look at the trend, and perhaps a fresh perspective on where it may lead on migration from the capital over the coming months as we head out of lockdown.

According to research from Hamptons International, around three out of 20 (15%) applicants who registered in a Countrywide group branch outside of London in April of this year were Londoners. This marked an increase from 8% in March and the last peak of 9% in April 2016. Of further note is that more than one-third (around 37%) were first-time buyers, up from 27% in April 2019.

Savills also reported seeing this rural trend last week, with 32% of new applicants looking at property in the country coming from London, compared to 21% last year.

What should be kept in mind however is that what we have been seeing has largely been registered interest in rural property, and not necessarily transaction volumes. And of those completed transactions it is still too early to see if this is a sustained, long-term trend, or merely a blip on the radar.

Until more comprehensive transaction data is available later this year there will certainly be an element of uncertainty over the whether this change of lifestyle takes a greater share of the market. But I consider it rather unlikely to be the case. 

What we are more likely seeing here is the opportunism of those with an existing interest in country living taking advantage of the technologies available to prompt a move to the country. Not everyone wants to live in a city, nor to endure a daily commute, but the reasons why so many youths and professionals are drawn to the capital each year do not predominately come down to room space and green living.

The lure of London is in its centralisation of some of the best job prospects throughout the U.K., and most of the major businesses throughout the city will still retain their central offices after this pandemic is over. Many will no doubt embrace more flexible work options where possible, but the bottom line is that office, and the many subsidiaries and services surrounding it, is here to stay; and for as long as it remains to generate jobs, London will become a magnet for those seeking work.

Perhaps though the main reason why London will not lose its lustre to the countryside is because people come for the work but stay for the lifestyle. London is big, brash and frequently annoying, but ultimately diverse in its energy and cosmopolitan way of life that keeps drawing people to this nation’s capital. And it is not just the young falling for London, older residents and retirees are increasingly choosing to stay in the city, preferring the proximity of friends and family, and the vibrancy and lifestyle options not so widely available in rurality.

COVID will certainly encourage some changes to lifestyles and priorities, but changes to the property map will likely also benefit other cities – over recent years cities to the north of London such as Leeds and Newcastle have attracted capital denizens for their more affordable housing and improving job prospects. Nonetheless, the capital will continue to attract people from across the U.K. for as long as it remains the country’s central hub for employment opportunities, tourism, and lifestyle. Thousands come each year to make connections and have experiences. And that is not going to change any time soon.