Richard Pickering, Head of UK Research & Insight gives a personal view of the business and role of property in ‘New Europe’ , his weekly email update.
The Corbyn conundrum Odds-on favourite Jeremy Corbyn this week scored 62% of the Labour Party vote to retain his position as leader of the opposition. But what next? Corbyn has vowed to ‘wipe the slate clean’, whilst London Mayor, Sadiq Khan, warns of the potential for a split, bearing in mind that 170 Labour MPs still voted for no confidence in their leader. With odds implying that the Conservatives are now three times more likely than Labour to win the next General Election, Theresa May’s hands are perhaps a little looser in pushing through a Tory vision for Brexit – if such a thing exists.
Culture and capital My home town of Hull has unveiled plans for its year as UK City of Culture, which will include arts, theatre and music. It has also attracted £32m of investment, part of which is being spent on a facelift for the city centre. The EU’s version: ‘The European Capital of Culture’ has previously been hosted by Glasgow (1990) and Liverpool (2008), with the latter reportedly generating £738m for the local economy and assisting physical regeneration projects. The UK was due to receive the award again in 2023, with candidates: Leeds, Dundee and Milton Keynes now potentially to be disappointed. The EU’s role in UK regeneration projects is a gap that will need to be plugged.
Bubbling up According to new research by UBS, London comes in second place (behind Vancouver) of a list of global cities with an overvalued residential market. This will come as little surprise to those failing to get onto London’s housing ladder. Low interest rates (now even lower), together with successive waves of international capital have fueled a massive housing boom in London over the past five years, where real values have risen 50% since 2013. The ‘Bubble Index’ shows high price-to-earnings (x16) and price to rent (x33) metrics for the capital.
#LondonisOpen London may be taking a step further towards devolution, as Sadiq Khan this week revealed his plans to create a separate work permit system for the capital. Whilst London faces greater specific threats from Brexit due to its exposure to financial services, it is also likely to be the most defensible location in the UK over the medium term, as investors retreat to prime and concentrate on cities with a global outlook. Scotland and Northern Ireland, which also voted Remain, might well watch Khan’s position with interest.
Richard Pickering, Head of UK Research & Insight.