New analysis published by Centre for London has revealed an economy that is sustaining slow growth, alongside a sharp slowdown of EU nationals coming to work in London, as Brexit negotiations roll on, and house prices recording the largest fall since the recession.
The findings are published in The London Intelligence, Centre for London’s quarterly publication which monitors demographic, housing, transport, economic and quality of life data to build up understanding of how London is performing and changing over time.
The third issue of The London Intelligence shows a significant drop in the number of foreign nationals coming to London. National Insurance Number Registrations were down over 20 per cent in the third quarter of 2017, compared to the same period in 2016, with the sharpest fall among EU nationals (25 per cent). The sharpest decline was among young people (18-34), dropping from 51,200 in the third quarter of 2016 to 41,400 in the same period in 2017, its lowest level in this quarter since 2012.
The London Intelligence also shows continuing uncertainty for a number of economic growth indicators. The analysis found:
- House prices fell 4.1 per cent in the year to November 2017, the largest fall since August 2009, according to Acadata figures – with falls concentrated in larger central London properties.
- New housing supply hit a peak in 2017, but a sharp drop in the volume of flat sales, alongside falling prices, may threaten housing delivery in coming months.
- The capital’s unemployment rate also increased marginally from 4.9 per cent to 5.2 per cent in the three months to November 2017, higher than the national unemployment rate which remained at 4.3 per cent.
Despite these concerns, the data suggests there are some reasons to be optimistic:
- Total visitor spending continues to be up, likely due to the weaker pound, with an average spend of £800 per visitor, 25 per cent higher year-on-year.
- Robust demand for office space in London, and continuing but slow job growth, with job numbers increasing by just over one percent in the year to September 2017, the second lowest rate since 2011.
- Growth in rents slowed, with larger houses and flats seeing rents fall in the year to December 2017.
- Air pollution levels along London’s roads have seen some dramatic improvements in recent months, with PM2.5, PM10 and NO2 levels down from September to December, compared to the same time in 2016. A combination of the weather, the introduction of the Mayor’s T Charge and low emission bus zones is likely to have improved local air quality.
Richard Brown, Research Director at Centre for London said:
“Despite the continuing uncertainties of Brexit, our latest analysis paints a mixed picture for London’s economy. Demand for office space is high, visitor spending is up and job growth is continuing – albeit slowly.
“But the accelerated drop off of foreign nationals coming to London to work, particularly amongst the young and those from the EU is a cause for concern. And the housing market slow down, both in terms of prices and transaction volumes, could feed through into slower delivery. London needs to be able to attract and retain talent, but also to tackle its long term housing challenges, if it is to sustain success in a fast-changing world.”