Life returning to normal in London, creating opportunities for landlords
- 13th July 2021
- Renting Property News
Mobility Index rises as lockdown restrictions are relaxed
As lockdown restrictions come to an end and more people return to the UK capital, life in London is starting to return to normal. This will present opportunities for landlords, particularly as workers return to the office.
New statistics from Google’s Mobility Index show London is getting busier, with more people in the capital driving, walking and using public transport. Activity has picked up markedly since the start of May, with the Index moving above 100 across all three categories of driving, walking and public transport.
The index measures visitor numbers to specific categories of location every day, such as supermarkets, parks and train stations. It compares this change relative to the baseline day before the pandemic. In May 2021, the index stood at 162.5 for walking and 144.6 for public transport, the highest level this year, demonstrating that London is returning to normal again.
The hospitality sector reopening and easing of social restrictions has naturally made living in the capital more appealing. More people returning to the capital should drive employment higher and lead to a rise in wages, something that in turn will benefit rents.
Figures show rents are at their most affordable in a decade. The average monthly rent in London accounts for 42% of a single earner’s average gross income, down from 49% in 2020. This should support rental price growth.
Another factor supporting an increase in rents is figures which show weekly earnings in the UK grew by 3.9% in February 2021 compared to February 2020. UK unemployment fell to 4.9% in the three months to February. Rental growth has traditionally followed wage rises in the past, suggesting rents will begin to recover to pre-pandemic levels.
The reopening of the leisure and hospitality sector has also been helped by the Transport for London active travel toolkit. The toolkit provides practical tools and advice to help people pick active travel options when commuting to work, such as walking, jogging and cycling. Areas where this scheme is most effective are likely to see rents go up the most.
Investment in the London transport network should also have a positive impact on mobility and subsequently the rental market.
Reports from GLA Economics show investment totalled £9.1 billion in 2018, equating to 25% of the spend for the entire country. This expenditure has consistently underpinned London’s rental price growth and should continue to do so in future.
Stephen Ludlow, Chairman of ludlowthompson, says: “London is returning to normal, with more people commuting to the office, which should encourage more activity in the rental market.”
“The TFL’s Active Travel toolkit puts a great amount of emphasis on alternative methods of travel such as cycling and walking. Landlords may want to look at targeting areas where this is utilised the most.”
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London is returning to normal, with more people commuting to the office, which should encourage more activity in the rental market
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