London feels like an all-action hero about to collapse

It is an exhilarating place to live and work, but how long can the boom last?

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The Independent Online

I live and work in central London and this puts me in the fortunate position of being able to walk to work. In fact, my usual mode of transport in the capital is Shanks’s Pony (that’s on foot, for anyone under the age of 40).

Being a pedestrian grants you several advantages: you can plan your journey time with accuracy, it’s generally quicker than using London’s clogged-up roads, it’s better for both you and the environment, and, not least, it enables you to be more in touch with what’s going on around you.

London is a quite astonishing place at the moment. The capital of the world in all but name, it is a heaving, dynamic, teeming metropolis, bristling with commercial and cultural activity. The pulse of the city is almost tangible, and if London could be anthropomorphised, it would be an all-action hero, conquering all in its path, but yet stressed-out, strung-out, and with blood vessels fit to burst.

So let me be an outlier: it simply can’t go on like this. It may be a depressing thought at a time of great economic well-being, but at some stage in the near future, our capital will surely have an embolism.

“As long as the music is playing, you’ve got to get up and dance.” So said Chuck Prince, the boss of Citigroup, in 2007, and we all know what happened soon afterwards. The irrational exuberance that fuelled the boom created the global bust. The exuberance currently felt in London may actually be rational – the influx of foreign money added to the pre-eminent position in global finance of the City has created a micro-economy in which jewel-encrusted Ferraris line the streets, every road in central London has a major building project on the go, house prices are rising before our very eyes, and every pub and restaurant is packed to bursting point.

The music is not only playing, it’s a deafening noise and who am I to suggest that we should pull the plug? But at some stage, London will become such an uncomfortable – and expensive – place to live and do business that the upward trajectory of the city’s fortunes will inevitably go into reverse.

Captains of industry arrive at their expense-account lunches horribly late, complaining about the awful traffic. Taxi drivers are livid about the closure of so many roads at the same time to facilitate shiny new building works. Visitors are shocked by the cost of the capital’s hotels (not to mention taxis). Indigenous residents are comprehensively priced out of the housing market. For many these days, central London is like a foreign country, almost literally, given the rise in tourists and inhabitants from overseas.

Respective governments have been quite happy to ride the wave, ensuring that the City’s financial institutions are not too bothered by regulation, and encouraging inward investment. So far, so good, and, if you can afford it, London is an exhilarating place to be at the moment. But are we just racing towards a tipping point?

I am not an economist, so I don’t know what measures to suggest to take the heat out of the market, while still preserving London’s status. All I do know is that someone needs to do something soon, or we’ll all get burned again.

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