And yet The Telegraph ran a story this week warning that London is facing an exodus on a scale not seen since the 1950s and 1960s when the capital faced a population decline following the Second World War. The pandemic is to blame, of course, with swathes of office workers no longer needing to be within easy distance of their usual workplace because they are working from home. With the theatres, galleries and nightlife out of action, the benefits of living in a small, centrally-located flat have disappeared. And when you have to live and work from that tiny flat as well, it is clear why the number of Londoners wanting to buy property outside the city with more space rose by 27 per cent between May and October compared with the same period last year, according to Hamptons International. Further up the scale, for homes worth £1m or more, that figure rose to 86 per cent.
Property prices are rising across the country but more slowly in London than elsewhere. Zoopla said that prices rose 2.7 per cent in the 12 months to October, compared with 4 per cent across the country. Yet the average price of a London home is £666,000, still well beyond many people’s budgets. Rents in London have also fallen, with some of the lowest yields of any city in the UK at 2.9 per cent, according to research from Aldermore.
However, despite a shift in people looking for more space – both inside and out – and not needing to be so close to work because they are not travelling in as much, if at all, London still has plenty to recommend it. The theatres and galleries may be closed for now but that won’t be the case for ever. The vaccine rollout could mean that life gets back to normal quicker than many previously thought possible, resulting in the return of entertainment venues, restaurants and theatres. It will also herald the return of international buyers to the UK. Builder Berkeley Group has bought more land in the capital, shrugging off concerns that there will be a mass exodus from London in favour of more rural locations. Working from home is all the rage now but it is thought that many will tire of it before long, if they haven’t already.
London will always be desirable for local, national and international buyers. It has fantastic infrastructure, public transport, job opportunities etc. Indeed, there could be bargains to be had in central London, particularly small flats which have recently fallen out of favour. The pied a Terre market is appealing to those who sold a London house, bought a family home in the country and have money left over to spend – at some point, they will need to be in the capital for work when offices re-open.
As a London-based mortgage broker, AWS Financial Services specialises in arranging loans for high-net-worth individuals purchasing in the capital – whether to live in or rent out. We are whole-of-market so can compare all the deals on the market to find the right mortgage for your circumstances. Get in touch for more information.