True enough it has its charms and endearing features, many that those who live there insist they couldn’t live without, but in the age of a global pandemic and economic crisis it’s not hugely conducive to stress-free living.
The current situation has meant that those working within hospitality and retail have been hit disproportionately hard across the year, and unfortunately for London this makes up a fairly sizeable chunk of their job economy.
Increasingly, as with all major global cities, earnings are failing to keep pace with the cost of living in these areas. True enough there is often a premium added to London salaries to take this into account, but those starting out or early on in their career simply can’t keep up.
What happens in these situations is that young people who want to live and work in the city are increasingly pushed out towards the fringes and outskirts where rents and the cost of living drop accordingly, however, this is a problem in itself, as with increased demand comes increased inflation.
Eventually, there are two possible outcomes – either employers increase salaries accordingly in order to allow young professionals to afford to live in the capital, or they’ll move elsewhere.
The pandemic and resulting economic crisis have put this situation into sharp focus this year and as reduced economic output and unemployment starts to bite, then the sustainability of living in one of the world’s most expensive cities is starting to audibly creak.
In a piece for Property Wire, Ryan Bembridge comments “London landlords could see rental demand fall, as a large number of tenants are looking to leave the city once the pandemic is over, research from flatshare site SpareRoom has found.
Of London renters who plan to move, half (49%) are looking to leave the city for good. As a result, there is expected to be a 13% net exodus of renters from London.”
One other reason floated is that the working environment in the UK has changed so drastically during the pandemic that remote working may well become a dominant situation for many. This, in turn, removes the need to be physically close to your place of work, or at least within a short travelling distance.
Where are they heading?
If these young professionals and renters are seeking to leave the capital, where might they be heading to?
Cities across the north west have been reporting increasing numbers of young workers relocating up north for years now with Manchester, Liverpool and Leeds the three leading candidates for many.
With the Northern Powerhouse initiative and local devolution has come much closer co-operation between northern cities and their mayors, and this has meant a huge improvement in transport and communication.
These cities are also developing big, future-proof local economies that are relying on tech, IT and the digital economy as more and more graduates move into this type of work. Furthermore, as they are home to some of the nation’s most popular universities, many are simply staying and settling in these cities.
With these cities already some of the most popular destinations for buy to let investors thanks to impressive yields, the implications of tis are that these numbers relocating are set to increase, and that the property markets in these areas are set to benefit hugely.