An exodus from London is pushing prices up elsewhere in the UK – that’s a good thing

Market forces should long ago have pushed economic activity from the capital out to ‘the provinces’

Sean O'Grady
Wednesday 08 September 2021 13:17
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<p>The pandemic and the rise in remote working has seen many people move outside the capital, pushing house prices up elsewhere in the UK </p>

The pandemic and the rise in remote working has seen many people move outside the capital, pushing house prices up elsewhere in the UK

Even the grimmest of clouds can carry some sort of gilt trimming, if you look hard enough. Even the Black Death resulted in an uplift in agricultural wages as a result of the subsequent labour shortage, rather like Brexit in fact.

So too, it seems with Covid and the long-overdue rebalancing of the grotesquely London-centric British economy. For example: Private rents outside the capital are rising at their fastest rate for 13 years, while those in overcrowded, overpriced, over congested London have slipped back from their highs. They’re still absurd, but the trend seems to be at least moderately downwards.

People in lockdown seem to have woken up to the value of even the tiniest of mini-patios as a release from confinement. Some have even opted to move to the likes of Hastings for a bit of fresh air, the biggest influx since William the Conqueror and his gang turned up for a seaside barney some years ago. Companies have discovered that they don’t need everyone to share the same price of carpet in some of the most expensive real-estate on the planet to function. Creativity and collaborative working have not perished in the pandemic; they’ve just moved.

This is good news. Market forces should long ago have pushed economic activity from London out to “the provinces” (such a condescending term), and, apart from a few banks shifting their back-office activities, it’s never really happened. Governments since the 1930s have used controls, special taxes and subsidies and grants to move jobs and enterprise towards what were once called the “deprived areas” (blunt but honest). Now we have Boris Johnson promising his new electoral heartlands in the midlands and the north a decade of “levelling up”. Before the pandemic he’d nothing much to show for his vague promise beyond shifting a few government agencies and sending some money for high street regeneration to marginal constituencies and a few represented by cabinet ministers. Now that little virus has changed the way we work and the structure of the economy so radically that it has kick-started something of an economic revolution.

There’s nothing wrong with it. The economy has adjusted, is adjusting and will adjust some more to these changes in people’s tastes. We need not be fearful of it; but it will still hurt some.

Of course it is also true that the move from London is creating fresh pressures on housing and rents in places that have previously been mercifully untouched by Londonmania, because they were beyond economical or reasonable commuting distance. Rents and house prices in such locations will inflate, with the usual baleful consequences. The answer to that, though, is to build more houses, and, to be fair, that has been happening, though by no means enough.

In the new era of footloose, dispersed, digital workplaces, anyone can work from pretty much anywhere. The “death of distance” that the internet has brought during so many years of commerce has now reached our working lives (though of course there are many, such as teachers, nurses and shop and factory workers for whom this won’t be the case).

On balance, it is greatly in all our interests. Now we just have to knock down the redundant office blocks just as we once demolished the old mills, and build some houses with gardens. That’s how to regenerate city centres. We should get on with it.

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