Friday, 8 January 2021

This should be interesting..

According to's poll, up to almost a half of London's tenants are looking to move out of London altogether, which, together with the cut in earnings in large setors of the capital's economy, should mean that the chancellor's efforts to prop up rental values through the furlough scheme will come to nothing. House prices will surely follow.

The only question remaining is whether this will mean that the government will have been deemed to have committed the unforgiveable sin of letting house prices fall and be booted out at the next election.


Rich Tee said...

This video, by somebody who lets out flats in Manhattan, sums it up. There are two reasons for paying expensive rent for a small apartment: to be close to work, and for the social and cultural life. Neither of these applies right now. Nobody is going to pay big rent to be cooped up in a tiny flat all day with no social life.

Mark Wadsworth said...

I expected London rents to fall a lot and prices to fall a bit. For the reasons stated by RT.

Rents fell a bit and prices went up. By hook or by crook, the govt appears to be achieving the impossible and keeping prices at insane levels.

The next thing they'll do it announce extension of the stamp duty holiday.

It'll all go pop in 2025 or 2026. Until then it's inflation, inflation, inflation, while we smoothly coast towards the next crash.

Frank said...

The article you link to says:
" Almost 1 in 3 London renters (27%) said they plan to move post-COVID. What’s more, half of them (49%) intend to leave the capital altogether. The upshot of this is a projected 13% net exodus of renters from London."
It seems to me that the "them" in "half of them" refers to "1 in 3 ... (27%)", i.e. half of 27% which he's rounded down to 13%. A far cry from "up to almost half".

Mark Wadsworth said...

F, sure, and only a few of the 13% who are "intending" to leave will actually leave. There are lots of things I have been "intending" to do for ages which I haven't done yet (and maybe never will).

Bayard said...

F, true, I misread it. OTOH, the statement "up to almost half" is true for all values between 0% and 49%, so I am not wrong.

M, however, I think this is a threshold effect, like the difference between "full" and "overflowing" being a single drop regardless of the size of the container. What we might be seeing here is a change from "more would-be tenants/homeowners than homes to let/buy" to vice versa, which will be interesting, as it is the situation the government has been professing to be trying to engineer for decades.

Mark Wadsworth said...

B, let's hope it happens.