London’s Falling Population & The Housing Market
For the first time in 30 years, London’s population has taken a drop. The last 12 months have encouraged more and more people to leave, while it’s believed that as many as 700,000 foreign-born residents could have left, leading to the capital being potentially eight percent emptier.
It’s a statistic that has already had an impact on the property market. During the height of last summer, surrounding cities and towns, particularly those on the coast, have seen heightened demand for property as people leave the city. This begs the question, will this continue throughout 2021 or will people return once the capital opens its door once again?
We’re going into what will be a very uncertain time. To help the property market find its feet, the government announced a 95% mortgage scheme in the recent Budget, but while people might be more inclined to buy, is it possible and will people be choosing London?
With more people able to work from home, and many businesses looking to leave the office for good – a problem in itself for London’s commercial property industry – the trend of moving out of the city could continue at a consistent rate. Then there’s the uncertainty of the economy. Without the furlough scheme and government support, we’ll start to really see the devastating impact the pandemic has had on the economy. If unemployment rates do hike at a large rate, on top of the 5.1% already out of work, then that will have a large impact on the housing markets, and particularly those properties driving high prices in London.
The average price of a home in London rose to beyond £500,000 little over a month ago for the first time, and with uncertainty within the job market, it’s quite the commitment. Which will not only see people unwilling to buy, but also unable to sell. Demand for flats in the city has already seen 16% less demand with many having to explore other means to keep their own moves out of the city on track. Quick sale home buyers such as Fast Cash Property have seen more and more custom as people look to ensure their sales and moves go through. But will demand from buyers looking to move into the city return?
That may depend on how many employers do demand their workers return to the office, while there will always be those who want to make the most of living in the capital, with the likes of the theatre, gig venues and sports stadiums all on the doorstep. There will also be those who haven’t enjoyed leaving the capital and wish to return. The Financial Times ran a report where one fashion designer missed London and the inspiration found within it, and that will be a similar story elsewhere too.
The jury’s out though and the next few months will certainly prove interesting. In the short term London could see a lessened demand and fall in property prices, but in the long term that could be just what is needed to attract younger buyers back into the capital in the years to come.