The Labour Party are desperately trying to change their tune.
After six months of rampant negativity, they have realised that humans prefer hope to despair.
Who would have guessed?!
Of course, it is quite difficult to inspire a flogged horse, especially when you’re as charismatic as an ulcer, but at least they’re trying.
But has the damage been done to London both in terms of the property market and the financial markets?
Well, here are some stats for you to ponder, if you so wish:
In 2024, Londoners bought just 5.7% of homes outside the M25 area, down from 7.8% in 2023 and 8.2% in 2022. This was the lowest total of such deals since 2013. The 2024 total was also 19% lower than the pre-Covid average between 2015 and 2019. (Source – Hamptons)
Hmmm, this somewhat flies in the face of all the “experts” in 2020-2022, who were saying that there would be a permanent exodus from London and that you would be a fool for buying a property near transport links – the “premium” would be wasted, because we would all be working from home.
As Dr Steven Pinker, Johnstone Professor of Psychology at Harvard University, said in April 2020:
“We’re apt to overestimate how it (Coronavirus) will change the world…
… when we’re in the thick of a crisis punditry goes into overdrive and we imagine that the disruption that we are currently facing will be permanent, but there is a massive tendency to slip back into life as normal and I think that will be the overwhelming tendency.”
Hmmm, Professor 1 Journalists 0.
Something to consider when you read panicked headlines and articles about anything.
But what about London as a financial centre?
Well, you have probably seen the headlines about how moribund the IPO market has been in London and that is true. But what they don’t show is that the London Stock Exchange is by far the biggest and most liquid in Europe for secondary deals, which partly explains why its share price is up 37% over the last year.
And in terms of Mergers & Acquisitions, there were a slew of big deals after Labour won the election. Indeed, according to Bloomberg:
“The deals signal that the UK remains the easiest European market to do M&A, despite companies complaining about higher taxes under Prime Minister Keir Starmer’s new government and an exodus of the wealthy from the country. Deal volume in the UK rose 81% to more than $160 billion so far this year, double the $82 billion tally from its closest rival Germany”.
That doesn’t mean that everything is rosy and that London is as vibrant as it was in 2012. Far from it due to various moments of political expediency and stupidity rather than strong leadership and informed decision making…
However, the UK isn’t the only country that suffers from political incompetence or worse and the demise of London has been massively overestimated. It is still viewed as the best city in the world.
As Dr Hans Rosling points out in his fantastic book, Factfulness:
“More news does not equal more suffering. More bad news is sometimes due to better surveillance of suffering, not a worsening world…
Good news is almost never reported. So, news is almost always bad. When you see bad news, ask whether equally positive news would have reached you.”
So, is it madness to suggest that the “exodus of the wealthy” is also overestimated?
I’ll go into this in more detail in my next Prime London Property Trends Letter.
