Transport planning, housing shortages, and tough immigration policies pose the biggest threats to London's status as a global financial hub, a panel of property experts said yesterday.
On 25 April, BNP Paribas Real Estate and Future Cities sister magazine Property Week ran a conference called London: The Global City? in the City of London. Speakers looked at the challenges facing London over the next decade, and how to retain its status as a leading world financial centre in face of competition from New York and emerging economies.
The biggest concern was the lack of a detailed plan for investing in London's transport infrastructure after 2019, when construction finishes on Crossrail 1, the east-west first phase of rail scheme Crossrail. Anthony Bickmore, Transport for London's head of property, told the conference that the property sector must lobby government more.
"There is no significant transport investment planned for London post 2019," he warned. Bickmore added that, as well as new projects, there was a need to maintain investment in the Underground system, as some areas had not been upgraded for 40 years.
London skyline, facing south-west from the City of London
(Source: Rich Heap)
Steven Norris, chairman of Soho Estates and two-time mayoral candidate, said it would make most sense for government to invest in Crossrail's proposed second phase -- Crossrail 2 -- crossing the city from Chelsea in the south to Hackney in the north.
"Wouldn't it make huge sense if we kept the tunneling technology and expertise and, when Crossrail 1 completes, move on to Crossrail 2?" he asked, saying this would let the city take advantage of the skilled people and technology when they become available.
However, Norris said there is resistance within government to investing in Crossrail 2: "We need to convince government to believe their own rhetoric about the benefits that infrastructure brings," he urged.
Ken Livingstone, former mayor of London -- who defeated Norris twice -- agreed, and warned: "No great city can stop investing. You constantly have to seek new projects to keep modernizing your city," he said. Livingstone said transport upgrades were crucial as central London’s population is set to grow from 8.3m now to 9m by 2020, and 10m by 2035.
"No great city can stop investing," said former London mayor Ken Livingstone
(Source: Amplified2010 via Flickr)
Such growth would worsen current problems with the cost and availability of housing. Livingstone said government must invest more in housing as the cost is increasingly unaffordable. He said the average wage in London is £26,000, and the average annual rent is £12,000.
"You can't have a successful global city if people can't afford to live in it," he said. He urged government to invest in the housing sector by buying sites for housing schemes that have stalled and building them itself. Investing in the housing infrastructure would support jobs, and start to address the problem of how expensive it is to live in London.
Norris agreed: "It is simply becoming an unaffordable city."
The other big challenge is immigration policy, specifically the coalition government's attempts to restrict numbers of people who can enter the UK. Livingstone said London would suffer under these policies as they would stop talented people entering the city.
The point was echoed by James Lock, managing director of Blackstone's real estate group: "We do need to attract the best and the brightest people into London, and so I'm a little alarmed by some of the current immigration policy."
Yet despite these challenges, London is well-positioned to maintain its place as a leading financial hub, not least because its main competitor New York also faces challenges.
These include the need to guard against extreme weather events, particularly hurricanes of category three and above. Livingstone told the London audience that some businesses were not fully functioning until four weeks after Superstorm Sandy -- a category two storm -- and that it would take ten weeks or more to get back to normal after a category three hurricane.
"There will be a force three hurricane, and that business community will be devastated," he said, adding that it would force some businesses to move their corporate headquarters away from New York. In that event, London would be an obvious choice.
— Rich Heap, Community Editor, UBM's Future Cities