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By Marc von Grundherr

Director, Benham & Reeves

OTHER FEATURES

Levelling 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 Levelling Up, Housing and Communities. I suppose the clue was also in the fact that the levelling 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.

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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 per cent. 

‘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 per cent 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 per cent higher in 2021 than 2020 (£2140) but over 16 per cent higher in central London (Source: Rightmove). Such increases are fuelled by just one thing - demand;

- Salaries are 46 per cent 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 2,000 years ago. 

Sorry Michael...

*Marc von Grundherr is a property expert and Director of Benham & Reeves, the leading London estate and letting agent with multiple locations across China, Hong Kong, Singapore, India and Malaysia 

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    Has the person who wrote this ever been North of Potters Bar?

    Bolton isn't a city, it's a town, and isn't even remotely comparable to Newcastle or Leeds. In terms of population density, Newcastle ranks 6th, and Leeds ranks 2nd in the country.

    These aren't destitute, grim, Northern hell holes with everyone walking around in flat caps and smoking woodbines. They are modern cities with diverse populations, living in gentrified and developed areas. Leeds financial industry is second only to London in the UK.

    The choice of these 2 cities alongside Bolton in the context of levelling up is bizarre, and indicitive of someone who hasn't actually experienced what they are writing about.

    As for levelling up to London's standards, I can say from first hand experience that there are areas of London way, way worse than anything you will find in any of the places mentioned here.

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    Shouldn't standard of living and disposable income be a key part of leveling up? Money goes much, much further outside London. Someone on £25000 in the North will have a far higher standard of living than someone on £50000 in London.

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    London is the ultimate Investment City is the guy who wrote this Article feeling ok. London is the worst place to invest he recognises property is double the price and therefore it follows double the Stamp
    Duty and should have double the returns but it’s other way around my returns in London are around 3% while in other parts ok UK returns 6% / 8% is more common and I recon property in other parts are often one third of London. We are hammered with more and higher cost Regulation’s that don’t apply to other parts of UK plus higher fees & Council Tax, so pound for pound we are far worse off than other Towns or City’s, so Mr Gove get your facts right and level up London.
    Max is right I’ll give him this one as regards Bolton it is a relatively small Town in Lancashire or call it Greater Manchester but to me it seemed as near to Liverpool when I worked there Watson’s Steel Fabrications was the backbone of the place and great people to do business with god rest you Phillip Green one of the best, I understand its been sold off or taken over since either way probably a loss to the area.

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