In the early days of the pandemic, I thought one long-term silver lining would be to make expensive cities like London cheaper for young renters. I reckoned the shift to hybrid work was going to persist. This would allow office workers to spread further out from overheated urban centres. Plenty of young people would still want the bright lights, but they might not have to pay quite so much to get them.I couldn’t have been more wrong. Housing costs in London did fall for a while, but now the scramble for rental property is more intense than ever. Advertised rents are shooting up. They are 6 per cent higher than pre-pandemic levels in inner London and 8 per cent higher in outer London, according to data from property website Zoopla. It is the same story in other big cities, from New York and Miami to Dublin and Sydney.
Where did I go wrong? It’s not that working patterns have reverted to normal. Between 2019 and 2022, the number of people in the UK who work from home more than doubled to almost 10mn, according to the Office for National Statistics. An official survey this year found that 84 per cent of those who had to work from home during lockdowns planned to do hybrid work in future.
The Pret index, which compares transactions data from Pret A Manger stores with their pre-pandemic average, confirms the shift. Transactions have settled at about 80 per cent of pre-Covid levels in office worker districts such as the Square Mile and Canary Wharf.