Behold, all you need to know about the lopsided and misfiring state of the British economy in one graph. Last year, the value of residential property in London and the south east overtook the value of housing in the rest of Britain & Northern Ireland combined.
Considering the aggregate regional levels hides the real concentration of property wealth however, as tracked by estate Savills.
The 10 most expensive London boroughs have an aggregate value equal to the total residential property markets of Scotland, Northern Ireland and Wales: both add up to around £550 billion. Within those ten boroughs just one, Westminster, accounts for £95 billion – twice the value of Edinburgh’s housing stock and three times Bristol’s.
There are a lot of reasons for the above, but probably the largest contributors are the on-going concentration of wealth at the top of the income distribution, the continued UK dependence on the City and ‘security’ capital flows which could yet turn into the ‘hot’ kind.
Either way the effect is obvious: London is the only part of the UK which has seen growth in real retail spending since 2006, thought to be around an annual 0.7%.
Alongside the south east Capital Economics expects this growth to accelerate to 1.5% a year to 2016, while other areas of the UK continue to contract.
Job creation has also become more concentrated. The ONS’ Labour Force Survey showed that of the 641,000 increase in jobs between September 2010 and September 2012 around 43% or 276,000 went to Londoners. That’s almost three times the 15% London share of the job market at the beginning of the period.