London property sector calls for offices to be recognised as critical economic infrastructure to unlock growth

According to analysis by the London Property Alliance (LPA), there has been a 54% decline in major planning applications in Central London over the last decade, which is leading to an acute undersupply of the modern, amenity-rich office space demanded by leading companies.

The London Property Alliance (LPA), which represents the leading real estate developers and investors in Central London, has called on the Chancellor to recognise offices as ‘critical economic infrastructure’ and support measures that ensure the capital continues to drive growth, jobs and investment across the UK.

London’s Central Activities Zone, which equates to roughly ‘travel zone 1’, remains the economic powerhouse of the UK, supporting 2.2 million jobs and generating around 11% of national economic output, while contributing the lion’s share of London’s £40 billion annual tax surplus to the Exchequer.

Despite London’s status as a leading global city, a combination of planning constraints, cost pressures and declining office stock risks undermining its competitiveness.

According to analysis by the LPA, there has been a 54% decline in major planning applications in Central London over the last decade. This is leading to an acute undersupply of the modern, amenity-rich office space demanded by leading companies.

LPA Chief Executive Charles Begley said: “London’s commercial centres power the UK’s high-value service industries and their success is inseparable from the country’s wider prosperity. These sectors rely heavily on modern workspaces in our key business districts to boost productivity, drive innovation and attract talent.

“The acute undersupply of prime office space in Central London is a major economic risk, particularly as global companies are increasingly mobile and London faces renewed competition from global city rivals, including New York, Paris and Hong Kong.

“Offices should be recognised as critical economic infrastructure and there must be further action to address the bottlenecks in the planning system and the funding challenges facing planning departments. On top of that, the Government must avoid the own goal of increasing the tax liability for businesses in high-growth sectors that are dependent on modern office space to thrive and grow.”