The Great Recession refers to the time between 2007 and 2009, considered to be the most significant economic downturn since the Great Depression.
There were multiple causes for the recession. The fall in investment combined with a lack of consumer spending led to a sharp drop in GDP. Also, the decrease in house prices and peak in oil prices further complicated matters, causing cost-push inflation.
Of course, England´s vulnerable capital city was expected to suffer immensely during this time. However, during 2007 and 2013 employment in five central London boroughs rose by 23 per cent, a faster annual growth rate than in the period running up to the crash.
Furthermore, job number recovery rates in the capital remained at the same stable level as the rest of the UK.
Then prime minister, Gordon Brown, reflected on what structural features and aspects of London´s economy helped the city to survive the recession.
He also considered whether there were policy biases in terms of public and private investment and cutbacks, and whether the programmes of economic intervention (bail-outs, guarantees and quantitative easing) had features that favoured London.
The devaluation of the pound by 25 per cent between 2007 and 2009 played a part in the boost of tourism and investment. Further to this, businesses fought to keep skilled workers who were mainly located in London. This ensured that the capital city´s economy was well-equipped to continue supplying luxury goods to wealthy individuals who were relatively unaffected by the financial turbulence.
It was during this time that London developed into a safe haven for overseas investment, particularly in the property sector. The prime central London market was the main focus, where 60 per cent of purchases were by overseas buyers between 2007-11. And after a brief slowdown in 2008, prices recovered fast, rising by 45 per cent across central London by 2013.
Unlike some, we have confidence in London´s property market no matter what Brexit may bring, and we wanted to share the reasons for our beliefs with everyone else.
As the previous points show, London´s economy has managed to prosper during economic turmoil before. So whether we emerge on the 31st October with a deal, no deal, a postponed date or who knows what else, we are assured that the areas in which our projects are based will thrive as they did before.
For example, our current project, Riverside Place, is located in Kingston upon Thames. In 2008, during the midst of the recession, Knight Frank reported that the Royal Borough was successfully weathering difficulties in the housing market. Because of this, the estate agent ranked Kingston second in a list of the ten most ‘recession-proof’ boroughs in the capital.
Overall, South London was home to eight out of the ten strongest-performing areas throughout the recession.
We are certain that our latest development will perform well no matter what just like it did a decade ago – Brexit or no Brexit.