Remote work may shift 835,000 jobs out of London, says report

Bloomberg

Central London could lose as many as 835,000 jobs in the aftermath of the Covid-19 pandemic, with employees in service industries increasingly able to work remotely and flexibly, according to research by a consulting firm.
An analysis of London’s labour market data by Advanced Workplace Associates, a consultancy based in the UK capital, showed that about 41% of people living and working in inner London could do their jobs away from their current
office locations.
The firm looked at 13 London boroughs plus the City of London, finding that many workers in the services sector are likely to be able to do their jobs outside the office. That could lead to a shift in where people choose to live.
“More people could now have the flexibility to decide their living situations around personal preference, rather than around where they are employed,” the report authors Andrew Mawson, AWA managing director and associate Lara Al Ansari said. “The movement to flexibility is not new, it has just been accelerated by the experiences of working during the coronavirus pandemic.”
Younger employees may be seeking lower rental costs while those with families could look for larger space that is more accommodating, the report said.
With more staff able to work remotely, offices could become venues for “fast-moving, high-value tasks,” the report said. Some roles are best suited to offices, including those that require special equipment or that need a secure, regulated environment, the authors noted.
Change could help support PM Boris Johnson’s “leveling up” agenda to boost employment and opportunity in UK regions, the report said. Much of London’s newly available commercial space could be converted to residential space, it noted.
Employees in the UK are currently advised to work from home as part of country’s efforts to combat the spread of coronavirus, though this could end when nation’s final restrictions are eased. Still, data from remote sensors in office buildings shows that employees entering offices in major UK cities rise to almost 50% of pre-Covid-19 levels
earlier this month.

House Prices in the UK Surge Most in 17 Years
UK house prices grew at their fastest annual pace for more than 17 years in June, adding to a growing wealth gap that’s worrying policy makers.
Property prices rose 13.4% from a year earlier, the biggest gain since November 2004, Nationwide Building Society said. It’s the first major survey prices for this month, indicating the momentum registered by estate agents and mortgage lenders in May is continuing.
Buyers are snapping up homes with more space outside urban areas after 16 months of lockdowns to control pandemic. The market also is benefiting from borrowing costs near a record low and a temporary tax break on purchases.
“Despite the increase in house prices to new all-time highs, the typical mortgage payment is not high by historic standards compared to take home pay, largely because mortgage rates remain close to all-time lows,” said Robert Gardner, Nationwide’s chief economist.
A separate report from the Bank of England showed mortgage approvals rose unexpectedly in May to 87,545, the highest in three months. Economists were expecting a slight decline to 85,800. The BOE also said
The value loans made surged more than expected to 6.6 billion pounds, double the level of the previous month.
Approvals usually translate into loans after a few months
Nationwide said house prices rose 0.7% from May to 254,432 pounds ($353,000), their third consecutive monthly increase.
Regional data shows all parts of the UK saw accelerating prices, the largest of which were in Northern Ireland and Wales with 14% and 13.4% respectively. Scotland and London were the weakest performing regions, though the capital still saw a pickup in growth to 7.3% from 4.8% in the previous quarter.
The findings were reinforced by a separate report from Zoopla, which painted a picture of surging demand, dwindling supply and properties selling in the shortest time in five years. Rochdale and Bolton in northern England and Hastings on the south coast recorded the biggest price gains of 65 towns and cities monitored.
“Prices are rising fastest in the most affordable markets as activity continues at elevated levels among first-time buyers and movers looking for more space or a lifestyle change,” said Gráinne Gilmore, head of research at the property website.
The Treasury will phase out the tax holiday starting on June 30, and it will end altogether on September 30. However, agents agents expect the market to remain buoyant as the economy reopens and millions of people move back into work.
The boom, which has been partly fueled by cheap borrowing costs, is now raising concerns at the Bank of England. Chief Economist Andy Haldane, who steps down from his post this month, has warned of growing inequality between homeowners and younger people unable to afford to get onto the property ladder.
Jon Cunliffe and Dave Ramsden, who both serve as deputy governors for the central bank, said after Nationwide’s report last month that policy makers were watching the house prices carefully as they weigh whether to pare back stimulus for the economy.
“Underlying demand is likely to remain solid in the near term as the economy unlocks,” Gardner said. “Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look towards the end of the year, the outlook is harder to foresee.”