According to the FT:
London rents rose at the fastest pace on record in November, according to official data that highlights the intensifying pain for tenants after two years of rising costs.
Rents in London increased by 11.6 per cent in the 12 months to November 2024, the fastest annual pace since records began in 2006, the Office for National Statistics said on Wednesday.
Average rents in London are now £2,200 per month. I am well aware room rents often exceed £1,000 a month.
Simultaneously, and no doubt causing this, London is booming in a way nowhere else in the UK now is. As the FT also noted a few days ago:
The UK is the only western G7 member where the best jobs have become much more concentrated in the superstar region over the past two decades.
High housing costs in major cities are a widespread problem today, but young Brits face a uniquely toxic variation in having an extortionate capital city that is also increasingly the only place where a top-tier career is possible.
They also noted:
A report last week showed that Britain has the highest share of workers who are overqualified for their jobs across all OECD countries. It is thought the concentration of graduate roles in its capital is significantly to blame for this.
London is fuelling inflation.
It is also fuelling inequality.
And it is draining the economy of the potential to grow.
The UK has a London problem, and there are few signs that this is really being acknowledged.
No wonder so many in Scotland, Wales and Northern Ireland want to quit a place so stacked against their best interests.
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There is another problem. Energy.
Much of UK energy infra is focused on London: gas pipelines (Aberdeen to London), elec (the old 400kV double circuit lines – 4 of them from the old/closed coal stations down to London). The gov’ and “we need lots more new pylons” could be re-framed as “with a move to using more elec – we need to build more power lines to London”. At no point do the elected chimps ever consider regional development – but because said elected chimps are London-centric, it would never occur to them to do so. It would never occur to them that having poured resource into London (e.g. Elisabeth Line) the rest of the country has been starved. HS2? London centric, designed to suck out more business from what passes for the UKs regions. What to do?
Apologies for the PS: https://www.youtube.com/watch?v=f51urcvWmsM
This was a guy called Paul Collier (Oxford economist) being interviewed on PoliticsJoe.
He attacks the role of the Treasury and how its policies disadvantage most of the Uk outside of London.
I thought this might be relevant given the topic.
(Maybe they could move the Treasury to … Scunthorpe? – given ’em a fresh outlook)
Paul is a difficult man. No fault there. When he’s on form – and he seems to be here – he’s very good.
The Treasury already has an “outpost” (the FT’s description) at Darlington. Perhaps more of its functions should be moved there?
Outpost is the right term. They must feel mightily lonely.
I agree. It’s crazy that we have large wind farms in Scotland generating valuable energy, but they get sent through expensive distribution networks to feed England when the locals get no benefit at all.
I think localised energy generation is the way to go, not just commercial energy farms but literally solar or wind-generated and used at source by the local business or home. That way we save on the very expensive connection to the grid and we don’t have to claim green areas to cover in solar panels and wind turbines. Thus satisfying the NIMBYS too.
But our politicians won’t promote that, of course, because it would cut out the energy generators and suppliers, and how would they continue to make record profits? Not to mention how much greener it would be for everyone?
If you are interested, I have a “community energy cook book” (yes I know pathetic phrase). I gave a presentation last week near Hull – and pointed to another project in South Wales, where all the hard “how do we do this” work has been done. I am happy to make this available to any & all. I am also willing to visit and talk to any group, at my own cost, to help them start. Folks – over to you. Real offer, you only need to say yes.
The only sure way to reduce Lodon’s domination is to move government out of it, the Midlands would be far more sensible. A new relatively small City adjacent to East Mids airport would be perfect. Next to the M1 and update rail links to ensure easy access from Birmingham, Nottingham, Leicester and Derby. Move HoP and most of Whitehall there.
Building new HoP outside London (I believe Doncaster has been suggested) might also be cheaper than trying to protect the Thamesside site from rising sea levels & continuing decay & obsolescence.
“Next to the M1 and update rail links to ensure easy access from Birmingham, Nottingham, Leicester and Derby. Move HoP and most of Whitehall there.”
Seriously, in this system, all that would do is deliver a massive increase in rents in those areas.
Any excuse to increase property prices and rents will be used by vested interests. It is the vested interests, and the system that supports and encourages them, that are the problem.
No thanks.
Moving parliament out of London and the people who make decisions is the only way to address this country’s inequality. And if that is deemed to difficult, it ought to be possible at least for departments to be moved.
I was talking to a very senior civil servant in the health department and she said there was no reason for it to be based in London. And how much better would public transport be in the north of England if the DfT were based, in say Bradford?
I think this is a Western problem.
Rents and house prices continuing to rise, wages and salaries having fallen way behind their value a decade ago. Forced austerity.
I think this is all down to neoliberalism which is about wealth extraction from the working/middle classes, rather than about wealth creation.
That’s why we have privatised all the country’s assets, and have the highest energy prices and rail fares in Europe (if not the world), and a health crisis and raw sewage in our rivers and waterways.
@ Ian Tresman
“I think this is all down to neoliberalism which is about wealth extraction from the working/middle classes, rather than about wealth creation.”
This seems to me to be a very pertinent comment. How on earth anyone can continue to support the Starmer government when along with many others the following example of extortion is being allowed to happen:-
https://www.theguardian.com/money/2024/dec/19/water-bills-for-households-in-england-and-wales-to-rise
Of course extortion is a major technique the Mafia use and yet clueless voters repeatedly enshrine it in the “Neoliberal Extortion” political parties they vote for!
“….. there are few signs that this is really being acknowledged.”.
There are no signs it is going to change. It is never going to change. All you see is talk It’s purpose is to stop anything more meaningful. There is no way out – except leaving the UK altogether. The rest of England can’t leave, but that does not mean nobody should. This is a matter of self-preservation, and self-respect, if Unionists actually possess any.
Neolib problem: for sure
London Problem: for sure. They are not mutually exclusive.
I think we also have a house-price-fixation problem and a media-focus issue.
For too many years the levers to tweek the economy have been biased in order to “protect” the city of London and maintain/increase house prices. Headlines suggested that house price rises were good?
These economic levers needed different settings for other priorities in other areas (eg Scotland, Wales, Midlands). Society didn’t need subsidies to inflate house prices .. but it benefitted the already asset-wealthy.
While that happened we’ve an un-curious, london focussed press. I am convinced that many folk are blissfully unaware of just how desperate those economic choices have made some areas of the UK. It is not featured in our press.
London does well. Mansfield?
The SNP have mitigated some of the worst choices…. And they have managed to expose some of the consequences of those choices. Look at the presentation in the press of Calmac cockup versus military-procurement, HS2, etc.
One could even be convinced folk work hard to actively promote conditions to distribute health, wealth & opportunity to some areas and then try not to let folk know they are being shafted! And lets undermine education to reduce mobility when the job is nearly done……
Apologies, I missed out a small link.
There is fierce criticism of any small failing in Scotland (e.g. Cost of Parliament building, or the Calmac cock-up). But less scrutiny when larger errors happen out of whitehall (such as Tanks that are not drive-able, or even the Free Port Disaster waiting to be fully unveiled). The level of venom in the critique seems to suggest an tribal need to undermine. I think the Scottish Government need to be more radical, and any failures should be used to help improve —- but even their constrained and limited policies seem to hold up an embarrassing mirror to the London Administrations.
You end up with Karl Marx’s Crisis of Accumulation. Hardly anyone can afford to buy what the Capitalists are producing. Or considering the game of Monopoly – one player owns most of the property but none of the other players can afford to stay in it. Without state intervention (redistribution, bank handouts) the system collapses.
Agreed
John McTernan (on BBC Radio Scotland GMS) has just said that the WASPI women shouldn’t receive anything; and politicians shouldn’t make promises that in government they can’t keep. That rules out both Conservative an Labour from politics, because they can only win elections by making promises the don’t keep. But the really telling matter here was that McTernan and the Conservative critic brought in to discuss the WASPI issue with him (did the BBC actually expect both sides of the argument would even be heard?); both decisively and dismissively rejected any payment at all was even due to the women, in spite of the Ombudsman’s decision. Labour never, ever made that position (nothing at all was due) clear when looking for votes. The real matter of significance here is that it provides proof positive that however you vote in Westminster, the Single Transferable Party will always be elected. Always. That is how it is set up to work. FPTP is its functional, electoral guarantee.
“but young Brits…”
Of course, it’s not just the “young”. The housing crisis affects all ages. I wonder if the FT know that?
I note also today that the thieving water companies and their friend the regulator have announced the big inflation busting increases that we can expect to pay to help them clear up the mess they have made.
While continuing to pay themselves massive bonuses and share dividends, of course.
I seem to recall that Labour, in opposition, were against the water companies passing this on to the customer.
When is someone going to stand up to them?
Again, everything we need, and have no choice to pay for, rents, energy costs, water, etc, through the inflation roof.
UK PLC, the home of greedflation.
Do you think there should be higher rates of tax for London compared to the rest of the UK? would that help correct the inequality?
Yes, for higher value properties.
No, fur lower value properties.
The need is for proper regional policy.
Thats interesting, CGT on a first property above a certain level in London (perhaps the South East?). Another smack in the eye for rich pensioners!
The FT’s journalist in this article and a previous one makes the telling point that living outside London does not make life financial easier for, especially young, people.
The living costs may be “lower” but the salaries are way lower than in London. Result worse off.
A more telling comment is that the UK economy is not creating well paid jobs for its people throughout the UK.
On this point it is clear that neoliberalism has failed. The UK private sector is incapable of achieving this.
Which leaves the state. Labour are not likely to do this but start paying civil servants and other government employees who work outside London at the London rate, remove the London differential.
This is true to an extent but purely anecdotally a number of my friends work in IT. They all earn decent wages for the UK and work remotely. They are all moving away from the capital and using their buying power to purchase homes. That pushes up the costs for the locals.
I myself live in West Yorkshire after moving from the South and the property prices have noticeably climbed since I moved up here.
We went to visit my oldest son a few weeks ago.
The Elizabeth Line is something else comparable to the Moscow Metro.
Compare it with The Cambrian Coast line earlier this year let alone things like the Trans Pennine services.
It seems to me that firstly either London Employers will have to pay a lot more if rents keep rising – the short term issue but the long term issue is that if things continue as they are we might see not only demands for English Devolution but English Independence – think of Singapore.
Yes you want water and electricity the price is……….
I would rather the Cambrian, any day.
@John Boxall,
“English Devolution” could work but only if the devolved entities have taxing power.
USA Devolution works because the States, Counties, Cities, Municipalities and “Principalities” all have taxing power mostly through property tax, sales tax and to a lesser degree an employment tax per worker usually paid by the employer (sometimes a 75/25% split).
Over half the states in the USA have a State Income tax.
And when people who live in London and the southeast leave to go North, London and SE exports its inequality which leads to house prices going up elsewhere, and when house prices go up, so does everything else it seems to me. The consequences for younger people in these areas is huge.
So, agreed.
Ian Tresman makes an interesting point.
If, as could well be the case, Neoliberalism is the controlling theory/philosophy of the U S A and its unstated “empire” then the problems it causes London extend worldwide.
The constitutional problems in South Korea could well be affected by a president who wishes to follow the practices of Neoliberalism, which are essentially predatory of the general population for the benefit of a wealth “elite”, who is in conflict with a parliament which has had more than enough of them.
Similar, as yet, less visible, problems occur in other countries of the West, not least in Europe where lack of cheaper gas, access to the Chinese economy are causing problems and the intrinsic longer term defects of Neoliberalism are increasingly difficult to obscure.
An article on thé Michael Hudson site, entitled “The U S Strategy of Controlled Anarchy: Syria, Ukraine and Beyond” develops this possibility.
Maybe Neoliberalism is well described by an old Cornish joke:
A farmer decided to cut his spending by not feeding his livestock.
“I were making money hand over fist when then the animals took sick and died!”
I’ve noticed this for decades which is why I moved North (from just outside the capital) and it’s really not that grim, in fact there are many things to love. Quite a few of my friends and family still live in London. They struggle to afford rent and live in relative shoeboxes for high amounts. Most of them will never be able to afford to own a home there.
I work remotely and make a London comparable income, when you take out the cost of housing. I would say my lifestyle is significantly better than theirs, although the cultural dominance of London can’t be understated. At my age, however, going out a lot has less importance compared to the comforts of home.
But I’ve noticed the price of housing really shooting up around where I live now in West Yorkshire. It seems like the property price wave has rippled all the way up here now. Tbh I’m sick of the societal focus on home ownership as a way to obtain wealth. We are fooling ourselves into viewing housing as a way to get rich when it should be viewed as a basic human right for everyone.
I live in the hope that more and more people will demand cheap and affordable housing realising that the price of homes will drop if demand is in anyway met. But I realise that’s as likely as me winning the lottery.
@ Mike Parr – regarding your generous offer of a presentation on localised energy – how do we get in touch with you?
Via me with Mike’s agreement