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Leveling Up Is A Fantasy

In recent days we have heard Michael Gove trumpet his plans to ‘level up’ the UK. We knew that he would be serious about this new hobby-horse when he changed the label of his new office from the Ministry of Housing Communities and Local Government to the Department for Leveling Up, Housing and Communities. I suppose the clue was also in the fact that the leveling up bit was put first in the name. As it is, the acronym this now creates is LUHC or as I prefer to call it the Department for LUCK.

Gove is going to need a lot of luck in achieving his goal to transfer prosperity from London to the reaches of Newcastle, Bolton and Leeds. I mean these fine cities no disrespect – but they are not London and never, ever will be no matter what this or the next minister names his or her department and regardless of how they may move the numbers around on a Treasury spreadsheet.

The ‘twelve missions’ unveiled as part of the Gove mission include a focus on education, broadband provision, public transport, well-being, research and development and some new city mayors. All worthy aims, I’m sure.

The specific housing announcements centre upon the regeneration of 20 urban sites in towns and cities beginning with Sheffield and Wolverhampton. And a quest to create more first-time buyers and to reduce the number of ‘non-decent rented homes’ by 50%. ‘LUHC’ also intends to remove the rule that has dictated that London receives 80% of government housing money as this will now be spread more geographically.

This is all very well of course as it grabs a few headlines and maybe some Red Wall votes however, as we have seen many times by successive governments, the headlines are often unmatched by the ultimate outcome and it’s notable that Gove’s pledges to enshrine his pet-project in law does not carry with it any new money at all – it’s all recycled cash from previous announcements.

Here’s the thing. London will always rule the economy and the housing market. It is simply where the jobs are and where the prosperity is. It’s the epicentre of the financial world and is where foreign home buyers want to be seen to own property and to live. Students yearn from afar too.

London has a majestic history. It’s steeped in tradition and it’s frankly cool. It also happens to be rather accessible by road, train, water and air. Thousands of supportive service businesses in hospitality, leisure, retail, industry and technology sit around the big city like the planets orbit the sun. Speeding up broadband, hiring a few apprentices and encouraging people to buy Peloton bikes north of Watford is not going to change these things.

London is the ultimate investors’ city:

  • House prices remain double that of the UK average.
  • It boasts 1,040,000 tenanted properties in the private rental sector and this has grown in number in the last five years. London has over £500 billion of the country’s £1.5 trillion buy-to-let value – one third of the entire value of the UK PRS.
  • 23% of all UK GDP is generated within London.
  • The vast majority of new, institutional build-to-rent units are in London and the immediate vicinity.
  • Rents in London overall were 10.9% higher in 2021 than 2020 (£2140) but over 16% higher in central London (Source: Rightmove). Such increases are fuelled by just one thing – demand.
  • Salaries are 46% higher in the capital than, say, the North East.

Michael Gove may tell us that he wants to slim down Britain’s Golden Goose by sending a few feathers up the M1. However I believe that it’s unfeasible that London will ever, ever be anything other than totally and utterly dominant – just as it has been since the Romans designated it such over 2000 years ago. Sorry Michael.


About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.