Covid, Ghost Cities and the Collapse of Property Prices in the West End and the City of London

22.11.20

An almost entirely deserted Oxford Circus on November 10, 2020, during the latest Covid lockdown in England. A previously unpublished photo from Andy Worthington’s photo-journalism project ‘The State of London.’

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Is this how the world as we know it ends, then — not with a bang, or even a whimper, but with the slow, silent death of shops, pubs, restaurants and live culture?

England’s second Covid lockdown, introduced on November 5 in response to rising infection rates, has, in a crucial pre-Christmas month for business, shut down all shops regarded as “non-essential” — in other words, to name just a few examples, all clothes shops, gift shops and bookshops, as well as pubs and restaurants — with a sense of timing that could lead one to conclude that it was dictated by Amazon and other online retailers for whom Covid has seen their businesses reap unprecedented profits.

The cost of this, in terms of businesses shutting down, and employees laid off, is not yet known, but it seems likely that, as 2021 unfolds, the centres of our cities and towns will be wastelands, reminiscent of the early 1980s under Margaret Thatcher.

What is more, we don’t even know if the lockdown will end as intended on December 2, at least allowing these shops, pubs and restaurants to take advantage of what, traditionally, has been their busiest time of the year, or if it will continue with, perhaps, just a short window of socialising allowed for Christmas, followed by the resumption of lockdown in the new year.

If this scenario comes to pass, those wastelands look increasingly likely to materialise, with shops, pubs, restaurants, hotels, all shutting down in unprecedented numbers, their lifeless facades joining those of other unfortunate businesses that never even managed to reopen at all, however briefly, over the summer and into autumn — theatres and music venues, for example.

So is there any hope? Well, yes, I think there still is, although I’m not as optimistic as I was during the first lockdown, which lasted from March 23 until “non-essential” shops were allowed to re-open on June 15, and which provided us with our first opportunity to glimpse how we might be able to change society for the better — curtailing our environmentally suicidal culture of over-exploiting finite resources to feed our gluttony (for fossil fuels, for too much meat, for “cheap” clothes produced in toxic global toxic sweat shops, for example), cutting the emissions associated with our hectic over-activity (too many planes, too many lorries, too many cars, the entire cruise ship industry).

As the global tourist industry collapsed overnight, it became apparent that we had all become overly reliant on it — even major cities like London were, in fact, economically lost without millions of tourists over-consuming on a daily basis. And while this looked healthy economically, it was not only environmentally unsustainable; it was also driven by greed — the greed of the property market, with astronomical business rents and astronomical private residential rents, exploiting a hospitality industry of the underpaid and overworked. Obsessed with growth and profit, few people saw how precarious so many people’s lives were until the whole thing ground to a halt.

And while the government, predictably, handed out eye-wateringly huge amounts of money to corporate entities, to prevent their collapse, and introduced a generous furlough scheme for millions of workers who would otherwise have lost their jobs, defaulted on their mortgages or rents and ended up homeless, no one could have foreseen how another major change — the shift to home working, and the end of the insanely overcrowded daily commute — would suddenly puncture the viability of the extortionately expensive property rental market.

A collapsing property market

With the City and the West End still largely empty — of tourists, of foreign students, and of office workers — the overpriced rental market for offices and shops is facing a slow collapse, one that is, frankly, long overdue. A month ago, the Guardian reported that Shaftesbury, “the central London landlord that owns Chinatown and swathes of Soho and Covent Garden” — 16 acres in total — was seeking to “raise £297m from shareholders to boost its finances, pay some debts and make investments once” — if, surely — “the outlook for commercial property improves.”

The company announced in September that it “had received less than half (44%) of rent for the six months to 30 September, and had offered new lease terms to struggling tenants, including rent waivers, shorter leases and monthly, instead of quarterly, rental payments.” This good to hear — especially about rent waivers — but it remains to be seen if this will be enough to keep West End businesses afloat. Even before this second lockdown the West End was a ghost of its former self, with just a fraction of the shoppers and consumers it used to depend on to survive.

The same week, the Guardian also reported that LandSec, “one of Britain’s biggest property companies”, which owns hotels, retail parks and shopping centres, including Bluewater in Kent, said it “intended to sell assets worth around £4bn over four to five years and reinvest the money in new developments” — although whether there will be any buyers remains to be seen.

LandSec “revealed earlier in October that it had managed to collect only a third of rent from its retail tenants five working days after it was due”, and that it expected rents at its regional shopping centres across the country “to drop by between 20% and 25% from their March levels in order for them to become ‘sustainable’ for tenants.”

In contrast, the company was buoyant about having “collected 82% of rental payment from its office tenants”, and said that it “was not forecasting a fall in office rental values”, a position that, to my mind, ignores the fact that many office-based businesses are tied to leases, and may well downsize in droves when the opportunity arises, as their employees continue to work successfully from home.

Residential rents down 14.9% in inner London

In relation to residential rents, companies and individual landlords are also suffering, Shaftesbury explained that, in September, it was “struggling to re-let flats, with a fifth of its 622 residential properties lying empty, after many of their previous occupants, such as international students and young professionals, returned to their home countries at the start of the pandemic.”

And just last week, the Guardian reported that, according to the estate agents Hampton International, “rents in inner London were down by 14.9% year on year as landlords slashed costs to attract tenants – lopping almost £400 off the average monthly rent, which fell from £2,564 in October 2019 to £2,182 last month.” That is a significant cut, but £2,182 a month is still extortionate for a monthly rent. That’s over £26,000 a year just in rent — before council tax and bills — and even if the costs are, for example, shared by a couple, it works out at over £13,000 a year, helping to explain why so many workers are paying over half their wages just on their rent.

Hamptons also explained that rents in the countryside were rising, as some London residents seek to move out of the capital altogether, but while some commentators have referred to this as an “exodus’, the property website Zoopla stated that “the idea of a large-scale move from London is probably an overstatement”, as its data “showed that most Londoners were looking for a rental property within the city.”

These are just glimpses of a collapsing property market in the West End and the City, and I can’t, of course, predict how it’s all going to pan out in 2021 — especially with the Tories seeking to overhaul planning laws to enable unscrupulous developers to transform offices and shops into whatever kind of tiny shoe-box prisons they think they can get away with — but it does seem to me that “peak property greed” has hit a wall, and that genuinely creative solutions are going to need to be found to address the aftermath of a collapsing economic system that had very clearly run its course even before Covid arrived.

* * * * *

Andy Worthington is a freelance investigative journalist, activist, author, photographer, film-maker and singer-songwriter (the lead singer and main songwriter for the London-based band The Four Fathers, whose music is available via Bandcamp). He is the co-founder of the Close Guantánamo campaign (and see the latest photo campaign here) and the successful We Stand With Shaker campaign of 2014-15, and the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. He is also the co-director (with Polly Nash) of the documentary film, “Outside the Law: Stories from Guantánamo” (available on DVD here, or here for the US, or you can watch it online here, via the production company Spectacle, for £2.55), and for his photo project ‘The State of London’ he publishes a photo a day from eight years of bike rides around the 120 postcodes of the capital.

In 2017, Andy became very involved in housing issues. He is the narrator of the documentary film, ‘Concrete Soldiers UK’, about the destruction of council estates, and the inspiring resistance of residents, he wrote a song ‘Grenfell’, in the aftermath of the entirely preventable fire in June 2017 that killed over 70 people, and he also set up ‘No Social Cleansing in Lewisham’ as a focal point for resistance to estate destruction and the loss of community space in his home borough in south east London. For two months, from August to October 2018, he was part of the occupation of the Old Tidemill Wildlife Garden in Deptford, to prevent its destruction — and that of 16 structurally sound council flats next door — by Lewisham Council and Peabody. Although the garden was violently evicted by bailiffs on October 29, 2018, and the trees were cut down on February 27, 2019, the resistance continues.

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13 Responses

  1. Andy Worthington says...

    When I posted this on Facebook, I wrote:

    Here’s my latest article, in which, as the second Covid lockdown bites, I wonder how many “non-essential” businesses will survive, but take heart from the news that office rents are collapsing, and that residential rents in inner London are down by 14.9% on this time last year.

    I can only hope that the uncontrolled property greed that was so dominant before Covid has finally hit a wall, and will be unable to recover, so that we have the opportunity for genuinely creative solutions to be found to address the aftermath of a collapsing economic system that had very clearly run its course even before Covid arrived.

  2. Andy Worthington says...

    Damien Morrison wrote:

    Good the whole rental industry in London is grotesque and obscene it’s over I went to the west end on sat.. Empty like the Omega man. I do feel for all those independent shops their dying hopefully good will come out of this a rebirth of swinging London with cool little indie shops and scenes.. As for residential rents have a look at vice mag London rental opportunities of the week to see how out of control it all is and it’s real the most comictragic hovels you’ve ever seen and expensive I remember living in a studio flat in shep bush black mould on the wall I mean the place stank crazy antisocial niebours.. RATS.. And for £1000 a month excluding council tax and bills.. But that’s cheap rent now.. Ooh oooooh up and coming shepherds Bush vibrant and buzzing two mins from the tube.. A charming reeking wet hovel cheap at a grand a month.. BALLS.
    I hope it all crashes.. There’s so many on the streets now Andy.. So many too many

  3. Andy Worthington says...

    That’s a searing indictment of the slumlord business, Damien, which more people really should know about. It simply beggars belief that, in a country where people know about the overcrowded slums of the past, they don’t know that people are being obliged to pay £1000 a month for places that are unfit for human habitation.

    Vice’s weekly feature is here, btw: https://www.vice.com/en/topic/london-rental-opportunity-of-the-week

  4. Andy Worthington says...

    Damien Morrison wrote:

    When I came back to London 31 years ago I used to squat with friends in Brixton.. Some really dodgy squats and scary people. But all of those squats were cleaner and better than the… RANK.. And it really was rank.. Hovel literally a tarted up miserable slum in shepherds Bush I mean the mould and damp with no airflow huge window but only a tiny slot opened a fetid wet sauna in the summer and a damp freezing hovel in winter everything was damp and wet I smelt of damp and in the next.. Cell.. A poor woman with extreme mental health issues was moved in and abandoned so of course she stopped taking her medications the police were called every other day.. The stress my god I lost two stone.. Best diet ever.. And all for a thousand pounds a mouth.. At least the squats were free.. Something must be done about this.. London is full of hidden favellas.. Hidden shantytowns

  5. Andy Worthington says...

    Yes, very well said, Damien – “London is full of hidden favelas, hidden shantytowns.” Out on the fringes of London where no one’s looking, or hidden behind respectable facades.

  6. Andy Worthington says...

    Damien Morrison wrote:

    The ones hidden in plain sight in the so called up and coming respectable areas.. Usually owned by the worst tore slumlords.. Their always the saddest hovels

  7. Andy Worthington says...

    Deborah Emin wrote:

    Andy, so true in every city and becoming more so.

  8. Andy Worthington says...

    I hope self-interest doesn’t simply trump human solidarity in the coming year, Deborah, as we really start to see the economic impact of Covid on the poorer members of society.

  9. Andy Worthington says...

    Deborah Emin wrote:

    Andy, did you see the video I posted of AOC speaking in the House of Representatives last week? It was a powerful evocation of the burden the poor are carrying in the midst of this pandemic. Most members of Congress would rather not be bothered.

  10. Andy Worthington says...

    She should be president, Deborah! https://youtu.be/nNBeI-G3eQQ

  11. Andy Worthington says...

    Damien Morrison wrote:

    The rich and powerful will only look after themselves they don’t give a damm for anyone else except of course if their useful and only while their useful.. Look at the streets homeless and the abandoned mentally ill.. Everywhere.. Everywhere all over the country you see poor sods begging.. I remember as a child you always had the local tramp… But not like now every government we’ve had since 1980 has in one way or another looted the country none more so than this bunch of horrors

  12. Andy Worthington says...

    And now the clown Johnson thinks that by jumping up and down and shouting “spiffing”, he can prevent Brexit from delivering the killer, self-inflicted blow to our Covid- and greed-ravaged economy, Damien. We are living in a time of mind-bending stupidity from our leaders, and indifference from the people.

  13. Andy Worthington says...

    Damien Morrison wrote:

    This is what happens when you’ve a country run by a bunch of overpriveliged low intelligence inadequate posh boys and unfortunately an apathetic dumbed down gormless population and utter stupidity corruption and rampant cronyism.. Starmer is about as good as a chocolate tea pot he’s a limp establishment stooge could have been different with Corbyn.. But the gormless public choose petty minded spiteful disastrous brexit completely based on lies over common scence and fairness.. The tories and the public are equally to blame for the mess we’re in and the disaster we’re heading for

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Andy Worthington

Investigative journalist, author, campaigner, commentator and public speaker. Recognized as an authority on Guantánamo and the “war on terror.” Co-founder, Close Guantánamo and We Stand With Shaker. Also, photo-journalist (The State of London), and singer and songwriter (The Four Fathers).
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