Why is London’s population in decline?

The vision of moving to the city is one that has faced individuals since the beginning of time. The aspiration from escaping one’s boundaries and living in the heart of the capital has often seemed idealistic, if not necessarily realistic. Young graduates flock to city firms, hoping to work their way up the respective industries and flourish in the urban environment. That was normal for those academically bright enough for years.

Yet the coronavirus pandemic has changed all of this. With remote working becoming the norm during the third lockdown, organisations have needed to adapt. Whether universities or companies, not meeting in person has become essential in order to prevent the virus spreading from person to person. As individuals have been locked down, thought has been given to where people live.

London’s population is set to decline for the first time in more than 30 years

This has meant London’s population is set to decline for the first time in more than 30 years. The accountancy firm PwC have argued the numbers living in the capital could fall by 300,000, from 9 million in 2020 to as low as 8.7 million. It would be the first time the city’s population had declined since 1988.

PwC, although official population figures are yet to be published, have done a convincing amount of research on this area. They believe the UK could face a ‘baby bust’ in 2021, with the annual birth rate dipping to its lowest level since records began. On London specifically, they argue an August 2020 survey by the London Assembly found 4.5% of Londoners – accounting for 416,000 people – definitely planned to move out of the city within the next year.

There are numerous reasons for this taking place. It is obvious that the Covid-19 pandemic has transformed how people are working. While many people will have lived in the capital from the moment they’re born, others have moved tot he city precisely because of the unrivalled employment opportunities it offers. 20% of graduates typically move to London within six months of finishing university. If individuals are working from home, there is a lesser incentive for them to live in the expensive capital itself.

The absence and insecurity of work caused by the economic shock of the pandemic has meant unemployment is rising. Figures show that unemployment has increased most in London boroughs, with advertisements for jobs falling in capital cities across Europe. Economists have argued London benefited from its dense city, numerous hospitality venues and widespread tourism. These were all things forced to close by the lockdown.

The PwC research found that 16% of UK residents were contemplating leaving the nation, with 53% stating that was because of Brexit

London is an area of the country defined for being forward thinking. If new developments are taking place and spreading innovation, it will happen first in the capital. Such technological innovation has already meant Londoners are more likely to work from home than any other part in the UK. This would allow people to both retain their jobs and have the flexibility of working in other parts of the country.

Nonetheless, Covid is not the sole factor. The PwC research found that 16% of UK residents were contemplating leaving the nation, with 53% stating that was because of Brexit. Net EU migration to the UK has already fallen since the vote in 2016 and will potentially turn negative in 2021 for the first time since the early 1990s. This means that more people would be leaving the UK for the EU than arriving. While ministers might argue Brexit provides the UK with the opportunity to increase its standing internationally elsewhere, this has clearly affected numbers in London.

80% of firms are expected to adapt a hybrid approach providing flexibility over how people work, an increase from 30% before the pandemic

The increase in individuals being vaccinated should provide more opportunities for society to return to some degree of normality. However, this doesn’t necessarily mean workplaces will suddenly revert to their pre-Covid state. 80% of firms are expected to adapt a hybrid approach providing flexibility over how people work, an increase from 30% before the pandemic. Now only 10% of firms look set to have an entirely office focus on their workplaces.

This could severely damage businesses working in the Square Mile financial district. With only 9,000 people directly living in that area, local businesses are reliant on trade from office workers. Footfall at those retail businesses was 83% lower in the middle of December compared to pre-pandemic levels, with public transport 71% lower and workplaces 60% quieter. This demonstrates the changes provided by the pandemic, compared to its booming period in the 1980s.

The period of financial innovation in that time offered the opportunity for more businesses to develop. Following a period of neoliberal economics, Margaret Thatcher’s government desired increasing the flexibility and power of the city in response to a stagnating economic activity under Labour and the Winter of Discontent. The move to the city was then something to be celebrated and encouraged, a significant contrast to today.

In reality, the pandemic will most likely spell neither the death of the city or its complete pre-Covid revival

With the advertising firm WPP saying it has merged more than 100 offices during 2020 and planned to cut its space by 15-20%, there is a clear sign that the office and process of working in person has dramatically altered. With office vacancy rates forecast to hit 10% in the first half of 2021, average city rents have also been set to fall by 10%. With the decrease in demand inevitably comes lower pricing.

In reality, the pandemic will most likely spell neither the death of the city or its complete pre-Covid revival. With almost half of City workers saying they would like to continue working from home after the pandemic, office companies are going to have to meet those demands. Similarly, 57% say they don’t want to work full time in the office.

However, whatever the benefits of Zoom and online communication, it can never fully replace that in person spirit of collective decision making and engagement. Places of hospitality, and our desire to attend them, will return through meeting others. While they have struggled over the last year, a revival and renewal of their demand will be possible. That will be dependent on people staying in, and returning to London. With sightings of rats increasing by 78% in October, individuals have a choice over whether to let humankind, or nature, ultimately triumph in London.