London - what's its future after Covid?

[Frimley111R]

I appreciate that there are long running threads on Covid but London strikes me as worthy of a bit of extra attention.

From my experiences of it (relatives who work there, me having worked there and living relatively close to it) I see this location, more than any other in the UK suffering the pain of major change to a huge degree. At the moment large companies are bailing out of London and employees who are used to WFH don't want to go back to the London commute. The days of masses of people commuting into London seem over, overnight.

This will decimate train revenues, bus revenues, congestion zone revenues, taxi revenues, not to mention thousands of small businesses/bars/restaurants that live off the daily workers. It seems to me that London is about to see the biggest change on decades.

So, where will these businesses go, what will be the impact/fall out for train/bus services? What will happen to all the office space now available and what will happen to property prices?

[TwigtheWonderkid]

With so many people's pension schemes invested in organisations with huge commercial property portfolios, the collapse of the London office rentals will have a huge impact on people all over the UK, who think it's got nothing to do with them.

My hope (as a Londoner) is that London is inherently an attractive place to work /live. As demand for office space falls, prices will fall, and when prices fall, demand will increase. Eventually it may recover to a decent extent. But it's just a hope.

[Gecko1978]

TwigtheWonderkid said:

With so many people's pension schemes invested in organisations with huge commercial property portfolios, the collapse of the London office rentals will have a huge impact on people all over the UK, who think it's got nothing to do with them.

My hope (as a Londoner) is that London is inherently an attractive place to work /live. As demand for office space falls, prices will fall, and when prices fall, demand will increase. Eventually it may recover to a decent extent. But it's just a hope.

Its a great place to work its just not so great I want to pay £500 a month for the privilege

[TwigtheWonderkid]

Gecko1978 said:

TwigtheWonderkid said:

With so many people's pension schemes invested in organisations with huge commercial property portfolios, the collapse of the London office rentals will have a huge impact on people all over the UK, who think it's got nothing to do with them.

My hope (as a Londoner) is that London is inherently an attractive place to work /live. As demand for office space falls, prices will fall, and when prices fall, demand will increase. Eventually it may recover to a decent extent. But it's just a hope.

Its a great place to work its just not so great I want to pay £500 a month for the privilege

I have a feeling that may in due course be offset by tax. The govt want people back at work, and the way govts get people to do as they wish, be it drive low CO2 cars or go to an office, is via tax. So be prepared for a sharp increase in income tax for those working from home.

[frisbee]

Giant olde worlde theme park for the Chinese.

[Muzzer79]

TwigtheWonderkid said:

With so many people's pension schemes invested in organisations with huge commercial property portfolios, the collapse of the London office rentals will have a huge impact on people all over the UK, who think it's got nothing to do with them.

My hope (as a Londoner) is that London is inherently an attractive place to work /live. As demand for office space falls, prices will fall, and when prices fall, demand will increase. Eventually it may recover to a decent extent. But it's just a hope.

Assuming that the WFH situation continues, would those with commercial property portfolios not just convert them to housing?

Admittedly, not the most straightforward thing to do at present. However, the last thing the Govt wants is the arse falling out of the property market so (further) changes to planning laws may make this a possibility.

And whilst the need to physically be in London for work may diminish, the desire to live there will not - IMO.

[crankedup]

I cannot see any reason why a London office worker would choose to going back into the office if they have the WFH option.
Dirty overcrowded trains, hellish daily journey x 2. Exorbitant travel costs. Wasting time travelling.

[okgo]

crankedup said:

I cannot see any reason why a London office worker would choose to going back into the office if they have the WFH option.
Dirty overcrowded trains, hellish daily journey x 2. Exorbitant travel costs. Wasting time travelling.

Seeing other humans. Social engagements with colleagues etc etc.

I've been WFH for a year now and I'm sick of it, if my firm said I could come back tomorrow, I'd start going in I think, certainly a few days a week. I am bored sick of being in the same room with nobody to talk with, and the effort of having to have calls with people every time I want to know something, when it could just be a chat over a coffee in real life.

[stu67]

Well, here I am sat in my office in the city and there are still very few people around.

I work in the property side for a large corporate and to be honest the staff are not running back to work. I've been in the office right through lockdown, had a project going on in London as well as a few abroad to keep me busy. However I'd be surprised if the big corporates carry on as before, we were looking at the amount of space we used pre covid and we are now looking at cutting back wherever possible (leases allowing). The last 5 months have been a big enforced testbed for home working that seems to have worked, not saying we will not have the offices but they will be smaller with less people using them on a daily basis.

[towser44]

I've worked from home for over 6 years now (so before it became cool ha ha). I'm sorry, but further to the post above, I'd be fuming if the government think a higher income tax is the answer to get those who work from home to not do so. I started working from home when my Office moved from a 30 mile round trip to a 100 mile round trip, the alternative for me would be a much lower paid job closer to home, so they'll get less income tax from me by default.

[smashing]

crankedup said:

I cannot see any reason why a London office worker would choose to going back into the office if they have the WFH option.
Dirty overcrowded trains, hellish daily journey x 2. Exorbitant travel costs. Wasting time travelling.

I work for a very large company with offices all over the UK...by and large all employee surveys have come back overwhelmingly in support of a more flexible approach going forwards...the words from senior management were pretty much "the idea of 5 days a week sat in an office to do work is dead"

[crankedup]

okgo said:

crankedup said:

I cannot see any reason why a London office worker would choose to going back into the office if they have the WFH option.
Dirty overcrowded trains, hellish daily journey x 2. Exorbitant travel costs. Wasting time travelling.

Seeing other humans. Social engagements with colleagues etc etc.

I've been WFH for a year now and I'm sick of it, if my firm said I could come back tomorrow, I'd start going in I think, certainly a few days a week. I am bored sick of being in the same room with nobody to talk with, and the effort of having to have calls with people every time I want to know something, when it could just be a chat over a coffee in real life.

Fair comment, however this need not apply to every WFH person. My daughter and husband are both City office workers and currently both WFH. They love it, they both envisage their Companies
continuing the arrangements currently in operation, possibly once or twice a month visiting the office. They do not mourn the loss of Social interaction with colleagues for one moment, as covid u locks they are enjoying more social time with friends rather than stuck on trains and buses. But I can see your own scenario working across just as many.

[TwigtheWonderkid]

towser44 said:

I've worked from home for over 6 years now (so before it became cool ha ha). I'm sorry, but further to the post above, I'd be fuming if the government think a higher income tax is the answer to get those who work from home to not do so. I started working from home when my Office moved from a 30 mile round trip to a 100 mile round trip, the alternative for me would be a much lower paid job closer to home, so they'll get less income tax from me by default.

No tax is fair on everyone. Every tax hit's someone who shouldn't be hit along with those who should. . The fact is, the vast majority of people working from home weren't doing so before Covid, and they have saved a fortune as result. If tax is to increase, it's not unreasonable to hit that sector. As the poster said above, saving £500/month!!!

[smashing]

TwigtheWonderkid said:

towser44 said:

I've worked from home for over 6 years now (so before it became cool ha ha). I'm sorry, but further to the post above, I'd be fuming if the government think a higher income tax is the answer to get those who work from home to not do so. I started working from home when my Office moved from a 30 mile round trip to a 100 mile round trip, the alternative for me would be a much lower paid job closer to home, so they'll get less income tax from me by default.

No tax is fair on everyone. Every tax hit's someone who shouldn't be hit along with those who should. . The fact is, the vast majority of people working from home weren't doing so before Covid, and they have saved a fortune as result. If tax is to increase, it's not unreasonable to hit that sector. As the poster said above, saving £500/month!!!

So instead of taxing the worker more for wanting a less busy life (can't see it being a vote winner really) why don't they look at ways to reduce that 500 a month cost first...or is that too difficult?

[TwigtheWonderkid]

crankedup said:

Fair comment, however this need not apply to every WFH person. My daughter and husband are both City office workers and currently both WFH. They love it,

As has been said in the media, if you can do your job from home, there's a reasonable chance that it can be done from home by someone in Mumbai, for 10% of the salary. As companies see their revenues and profit drop as a result of the recession, this will be more and more on the agenda.

People who are boasting about how easy it is to work from home can have no complaints if they are first out the door. IMHO.

[Johnnytheboy]

okgo said:

crankedup said:

I cannot see any reason why a London office worker would choose to going back into the office if they have the WFH option.
Dirty overcrowded trains, hellish daily journey x 2. Exorbitant travel costs. Wasting time travelling.

Seeing other humans. Social engagements with colleagues etc etc.

I've been WFH for a year now and I'm sick of it, if my firm said I could come back tomorrow, I'd start going in I think, certainly a few days a week. I am bored sick of being in the same room with nobody to talk with, and the effort of having to have calls with people every time I want to know something, when it could just be a chat over a coffee in real life.

A large proportion of people who can WFH will disagree with you.

A lot of office space in London will become vacant.

Planning reform will enable a lot of this office space to be converted to flats.

But a lot of the office servicing jobs for those flat occupants will have gone.

So apart from a few havens of the super rich, London will become a giant ghetto.

[TwigtheWonderkid]

smashing said:

TwigtheWonderkid said:

towser44 said:

I've worked from home for over 6 years now (so before it became cool ha ha). I'm sorry, but further to the post above, I'd be fuming if the government think a higher income tax is the answer to get those who work from home to not do so. I started working from home when my Office moved from a 30 mile round trip to a 100 mile round trip, the alternative for me would be a much lower paid job closer to home, so they'll get less income tax from me by default.

No tax is fair on everyone. Every tax hit's someone who shouldn't be hit along with those who should. . The fact is, the vast majority of people working from home weren't doing so before Covid, and they have saved a fortune as result. If tax is to increase, it's not unreasonable to hit that sector. As the poster said above, saving £500/month!!!

So instead of taxing the worker more for wanting a less busy life (can't see it being a vote winner really) why don't they look at ways to reduce that 500 a month cost first...or is that too difficult?

Yes, it's too difficult. A tax increased can be announced and take effect from midnight. Instant increase in revenue. HTH.

Doesn't need to be a vote winner, too long before the next election. And it might be popular with those it doesn't effect. Lots of people are really suffering financially as a result of Covid. Others are coining it in, saving on commuting, coffee, lunches etc. Taxing those people might not be that unpopular.

Edited by TwigtheWonderkid on Tuesday 1st September 15:56

[smashing]

TwigtheWonderkid said:

smashing said:

TwigtheWonderkid said:

towser44 said:

I've worked from home for over 6 years now (so before it became cool ha ha). I'm sorry, but further to the post above, I'd be fuming if the government think a higher income tax is the answer to get those who work from home to not do so. I started working from home when my Office moved from a 30 mile round trip to a 100 mile round trip, the alternative for me would be a much lower paid job closer to home, so they'll get less income tax from me by default.

No tax is fair on everyone. Every tax hit's someone who shouldn't be hit along with those who should. . The fact is, the vast majority of people working from home weren't doing so before Covid, and they have saved a fortune as result. If tax is to increase, it's not unreasonable to hit that sector. As the poster said above, saving £500/month!!!

So instead of taxing the worker more for wanting a less busy life (can't see it being a vote winner really) why don't they look at ways to reduce that 500 a month cost first...or is that too difficult?

Yes, it's too difficult. A tax increased can be announced and take effect from midnight. Instant increase in revenue. HTH.

Ah yes lots of stick but no carrot..that always works out well for those involved...especially because no one can be bothered to sort out the problems because "too difficult".

[pocty]

Muzzer79 said:

Assuming that the WFH situation continues, would those with commercial property portfolios not just convert them to housing?

Admittedly, not the most straightforward thing to do at present. However, the last thing the Govt wants is the arse falling out of the property market so (further) changes to planning laws may make this a possibility.

And whilst the need to physically be in London for work may diminish, the desire to live there will not - IMO.

And what do you think putting 100x 1000s of new properties onto the market so suddenly will do....



Pocty

[Murph7355]

stu67 said:

Well, here I am sat in my office in the city and there are still very few people around.

I work in the property side for a large corporate and to be honest the staff are not running back to work. I've been in the office right through lockdown, had a project going on in London as well as a few abroad to keep me busy. However I'd be surprised if the big corporates carry on as before, we were looking at the amount of space we used pre covid and we are now looking at cutting back wherever possible (leases allowing). The last 5 months have been a big enforced testbed for home working that seems to have worked, not saying we will not have the offices but they will be smaller with less people using them on a daily basis.

This.

Large companies have been waking up to the fact that their real estate costs are their second biggest hit for nigh on a decade now.

Pre-Covid, the rise of hot desking and other funky uses of space were done to try and soften the peaks in usage - allowing everyone to have their own desks when they weren't at them for at least 20% of the year was daft. Money down the drain.

Some firms have been very savvy in terms of trying to drive the people:desk ratios up. As stu67 notes, lockdown has now been a mass enforced experiment on that front.

For some roles it won't work. For most City bound roles it can.

I expect big reductions in footprint for the bigger firms. And the space they do have will be reconfigured to suit casual and formal meets between colleagues who largely work remotely. Those roles that can't readily work remotely will continue with rank and file desks etc, but they'll be in the minority.

Enterprising landlords need to be thinking about how they can utilise the space they now have. More retail in London probably isn't needed...but housing would be a good shout. Hotels possibly too. Prices for both in Zones 1 & 2 are very high. More supply right in the thick of things would level that off and see a much more balanced environment.

London's an awesome city. One of the best in the world. This won't kill it. But it will see it adapt again.