The City of London is today unrecognisable from the form it took just two years ago, as the impact of the pandemic has left it relatively quiet and lacking the commuter traffic that has long characterised the Square Mile.
In fact, a recent report showed that footfall in London stands at just 35 per cent of pre-pandemic levels, with figures from IW Capital showing that, on top of a lack of commuters and foreign tourists, nearly 3m people moved out of cities during the pandemic.
This exodus from the Capital has, it seems, also provided an exodus of capital with the demand for houses costing in excess of £1m rising outside the Greater London area, accounting for over half of purchases for the first time since 1995.
This shift in where the wealthy live will provide a boost for the regions outside of London, with IW Capital’s research showing that 42 per cent of investors planning to support a local business or entrepreneur who benefits their community.
With the rise of community focused investment and the significant increase in the number of businesses started during the pandemic – over 800,000 in 2020 alone – local economies up and down the country are in line for a significant boost from private investors.
One prime example of this is IW Capital CEO Luke Davis, who as a resident of Hove, has led a multi-million pound investment and renovation project on the seafront, creating a community hub and world-class entertainment venue known as Rockwater Hove.
“The pandemic has had an impact on the UK in ways that we could never have predicted, with wealthy individuals previously tied to City of London desks now free to move and live away from urban centres,” Davis told City A.M.
“This has created a new class of investor, one more concerned with the impact their capital is having and the difference it makes to their local area. It is hard to have an impact on a city like London alone, but by moving to the regions, new opportunities to effect change have arisen.
If my work on Rockwater has taught me anything it would be that, given the chance, investors are more keen than ever before to make their financial decisions with altruism in mind.
“That is not say they don’t need good returns, but that if they can, doing good with their money is now a priority.”
“The following year or so will be crucial for UK economic growth, and SMEs and entrepreneurs will be key to that given that they make up 99.9 per cent of private sector businesses and employ nearly 60 per cent of the workforce.
The investment community that backs these firms will, therefore, be equally important so it is hugely encouraging to see this optimism and activity, especially in the UK’s regions and outside of traditional economic centres,” Davis concluded.