London Has Become a Better City — for the Rich

When Covid-19 hit in 2020, many worried that London would bear ugly pandemic scars for a long time to come.

A 2021 report from the London School of Economics set out five potential scenarios for what the future might hold. If things went pear-shaped, it warned the city could experience “significant affluent household flight,” near-zero international immigration and rising emigration as jobs left. Worsening public services would aggravate high levels of deprivation, leaving a state of gradual decline, reminiscent of the late 1970s and early 1980s.

The risk of urban flight looked real enough when Londoners were leaving the city in favor of the countryside or coast in what was called the largest migration out of the city in a generation. Hybrid work threatened to hollow out once-bustling areas, eliminating the livelihoods of many service-sector workers.

Sure, we’re not fully back to offices.

But you wouldn’t recognize the doomsday scenario walking through Covent Garden or Soho today or even commuting into the City. Much of central London is buzzing despite the cost-of-living squeeze. Travel on London’s Underground and bus services was back to over 80% of pre-pandemic levels last month, despite occasional disruption from strikes.

In some ways, the UK’s capital city has become more livable since Covid hit, especially for those with means. There’s more outdoor dining, more bicycles and scooters, and improved air quality. Transport has bounced back but hybrid work means it’s often less crowded. And I’ve seen signs of community-building from the pandemic continue, particularly in organizing support for food banks.

Indeed, the recovery in London has been swifter than many imagined. Mayor Sadiq Khan’s so-called “boomerang Londoners” have returned for the reasons people always flock to cities — the cultural and social life, the car-free convenience, the anonymity, proximity and vibe. Increasingly, there are at least anecdotal reports of older people giving up the country pile for a smaller perch in the City.

As the UK has been flirting with recession, London’s economy has grown nicely. Footfall is still down 10.9% for all UK destinations from 2019, but it’s down only 5.1% in London, according to data from Springboard. The “Pret index,” a useful proxy for footfall in busy areas with the lunch shop, shows substantial recovery from pandemic lows, while recent Office for National Statistics data show levels of growth that Prime Minister Rishi Sunak could only dream of for the country as a whole.

In important ways, however, Covid has left its mark on the megacity. London’s social fabric was already frayed, but the pandemic has worsened long-festering problems such as a lack of affordable housing and widened inequalities in terms of both life expectancy and income. That matters since more unequal cities are often linked to higher crime rates and greater levels of dissatisfaction among residents. Great wealth disparities are typical of global cities, but they can ultimately (as New York has found) create social divisions and lower living standards, driving people out.

Reducing that gap without driving away the city’s wealthier residents is the challenge now. London’s is a young and diverse population. Increasingly, though, young people in London are either living paycheck to paycheck, relying on the bank of Mom and Dad or leaving. Rents rose by at least 15.7% last year. More than one-third of social housing tenants in London say they are struggling to pay for basic needs; 27% of private renters also declared they were struggling to make ends meet.

London’s affordability gap also affects workers who are solidly middle-class by any standard. Despite softening home prices in some areas, the cost of borrowing has more than doubled in the last year. A report from asset manager Schroders found housing affordability at its worst level in 150 years, with homes costing 12 times average earnings in London, compared with 7.5 times in the Midlands and 5.5 times the average salary in Scotland.

The number of new businesses registered in London in the past couple of years is down from the track record for the few years before the pandemic, which is true for the UK as a whole and speaks not so much to a passing virus as the UK’s departure from the EU.

Brexit has taken a toll on London through both increased prices and staffing shortages apparent throughout the childcare, retail and hospitality sectors. Though data from Morgan McKinley shows the number of available financial services jobs has been increasing since the pandemic, Brexit has also meant a loss of at least 7,500 financial services jobs.

The number of European Union students at British universities is now only half what it was pre-Brexit, representing a loss of cultural capital and soft power whose implications we may not fully appreciate for some time. Brexit has also put a strain on the heavily London-centric creative industries that are a big part of Britain’s global appeal. If Mayor Khan could declare independence and join the EU, he might jump at the chance.

Brexit, the country’s rail strikes and the National Health Service’s broader troubles are beyond his control. But the city can do more to remove planning and other barriers to homebuilding. It can go further in reforming a police force that has lost public confidence both as a result of high-profile police crimes against women and a poor record of tackling petty and violent crime. And it can do more to work with businesses to improve skills and opportunities among the most disadvantaged young people.

The mark of a great city is its capacity for renewal and adaptation after adversity. It’s no wonder the outlook for London tops global league tables. A city that survived the Great Fire, plague and bombing during the war has a pretty good chance of finding solutions to the problems created by Covid and Brexit — so long as it’s willing to face them.