As the government marches ahead in the search for cuts in expenditure, many are considering the knock-on effects such as increased unemployment- a very valid point.
But with each cut, there will be other things are affected. Take the cut in schools expenditure. A huge disappointment for pupils, parents and all those directly involved in the learning environment. And then of course, there’s the new school building program which has been dramatically cut back.
But then which firms were going to carry out that work; where do they themselves work ? Usually from an office of course, but most of these smaller building companies and architects etc are based out of London. But some of the bigger providers, businesses largely built up over the period of high public spending, many of whom are located in London, are going to lose a lot of work, and down-sizing will be necessary.
This will inevitably mean that offices currently occupied will become vacant over time, and how might that affect the rental values of London office space?
Rental growth has only recently improved, and if a large amount of office space hits the market at the same time, growth could stop.
But this probably won’t happen as contracts are probably written for a reasonable term of years, and nowadays the employer can’t just make a huge number unemployed overnight.
So the relatively finely-balanced office market in London will probably not be affected that much; much less affected than the school with inadequate facilities.
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