London’s population has swelled by nearly 40 per cent since the late 1980s. But the pandemic has applied the brakes. An estimated 700,000 city dwellers have already moved out. More may follow as people re-evaluate where they want to live. Big employers are dabbling with hybrid models that involve working from home. Staff who do so regularly will want more space.
If London’s popularity dimmed, so would house prices. The average £2m Central London property fell in value by 4 per cent last year, while one of the same value in the country rose 5.5 per cent, said Savills. That is a break from the trend of the past few decades. Average London prices went up more than 12-fold between 1985 and 2018, compared with an increase of less than eight-fold for the UK as a whole, according to Land Registry figures.
Cities such as London offer long commute times and a high cost of living in tandem with well-paid work based in offices. They could be particularly affected by the work-from-home trend.
If the trend continued, a cycle of decline could begin, as it has in some post-industrial cities. Here, falling revenues from tax and public transport have hit municipal services.
But London has shrunk before. Inner London’s population peaked in 1911, as better public transport allowed people to live further from their work. Wartime bombs and the postwar development of New Towns had a bigger impact. London lost one-quarter of its population in the half-century from 1939. It did not overtake the previous peak until 2015.
About 3 per cent of the world’s 2,000-odd cities with more than 300,000 inhabitants shrank between 1970 and 1990, UN statistics suggest. Nearly a third of them were British, a quarter German and a fifth American. Deindustrialisation was a common theme, though the biggest depopulation of any city in the 1970s occurred in Phnom Penh, a deliberate policy of the genocidal Khmer Rouge.
Cities wax and wane. Population growth returned to London in the late 1980s, fuelled by its ascent as a financial sector. International migration increased. About 37 per cent of people living in London were born outside the UK, compared with 14 per cent for the UK as a whole.
Another factor in the urban revival was the growing desire of graduates to be near restaurants, nightclubs and gyms. A perception that densely packed cities speed the flow of ideas was yet another. Those advantages have not gone away. Most likely, the capital will not shrink for long.
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