The West End economy is centre stage of UK growth
Last week, the Office of National Statistics confirmed the economic recovery continued in the final quarter of 2013, driven by strengthening consumer spending and investment. Following this, the Institute of Chartered Accountants, have published impressive business confidence figures which have led them to forecast growth of 1.5% in the first quarter of 2014 alone.
London is the powerhouse of the recovery, with 80% of private sector jobs being created in the Capital; and the West End economy is leading the way in London’s international race. Not only is growth in the whole UK economy storming ahead of the Eurozone (0.8% versus 0.1% in Q3), the IMF is predicting the UK will be the fastest growing western economy this year.
The West End is the heart of London’s retail and entertainment sector and with the pre-Christmas sales period posting record sales, up 10% from last year, buoyed by a swathe of international visitors stocking up on bargains, it perhaps comes as no surprise to many Londoner’s that that the UK economy is expected to overtake Germany as Europe's economic powerhouse..
As we compete to retain our title as the world’s greatest city, the number of foreign tourists visiting London was up 20 per cent last summer to a new record - making it the world’s most popular destination, with almost 5 million visitors to the capital between July and September. Those figures exceed the number coming to London during the 2012 Olympics, demonstrating an Olympic legacy that is treating London well. As Boris has said “These incredible figures prove that London is without doubt the greatest city on the planet.”
But it may not be good news for everyone. On the back of the economic recovery and renewed international interest in London house prices in areas of the West End have risen dramatically with prices in Marleybone, for example, recording increases of 12.3% in 2013, while more established markets such as Mayfair rising 11.6%, and prime central London as a whole closer to 8%.
This is not only for a challenge for those looking to get onto the property ladder in the heart of the Capital, but also raises concerns about Central London being used as an international parking lot for investor’s cash. Tackling this and ensuring the West End remains a vibrant residential community as well as a key international destination will be one of the key challenges for the West End in the coming decade.
Housing policies such as Westminster’s Fair Share, which I established, will be essential to delivering affordable housing in the West End and rewarding workers who provide vital services that keep the Capital moving and retain its international reputation.
We need also to think creatively to ensure the diversity which gives the West End the character that makes it such an international hub is retained. Keeping traditional sectors, like the creative industries,and small, specialist retailers in and around Soho will be vital for the future. Upward pressure on rents, and high demand for premium retail space, coupled with the anticipated boost from Crossrail will all bring both benefits and challenges to the West End. Striking that balance is no easy challenge.
As 2014 gets underway and forecasters revised upwards expect economic growth across the UK the West End will continue to be centre stage to London’s international reputation and a driving force of growth both in the Capital the country as a whole.