London, United Kingdom

Historical Background

Beginning as the Roman origins Londinium, London grew through its Norman and medieval periods up until the Great Fire of London in 1666, which destroyed much of the original city of half-timbered buildings. Subsequently, it grew and developed toward the West End, the center of the court and the royal palaces. By 1750, it was the biggest city in Europe, with a population of half a million.

A more significant growth spurt, however, came in the nineteenth century, when in the course of a hundred years, its population grew from 1 million to 6.5 million. This was the period when much of Georgian and Victorian London, with its distinctive terraced housing, was built. This period also saw the creation of areas of slum housing with poor families living one to a room. During the late nineteenth century, the City of London (the historic center of the city and a separate political entity) began to emerge as a major financial center, servicing both the needs of empire and capital investment worldwide.

London's most rapid physical expansion, however, was in the interwar period from 1919 to 1939, when its area doubled as suburban semidetached housing spread out, aided by the new subway system. Inner London, the former London County Council (LCC) area, is primarily nineteenth century in origin, whereas outer London is largely a twentieth-century creation. After World War II, the creation of the green belt limited the outward expansion of London, although some development jumped this barrier; the London region now extends into a commuting zone 30 miles or more beyond. The City and the East End of London around the docks suffered major bomb damage in World War II, with large areas of housing being destroyed. Miraculously, St. Paul's Cathedral, Christopher Wren's great masterpiece, survived intact, although many of his other City churches were destroyed.

A Global Financial Center

The contemporary economy, social structure, and housing market of London need to be seen in the context of its role as one of the world's leading global cities. London, along with New York, has been one of the two major centers of global finance since the deregulation of the late 1980s. Tokyo, which was also a major global financial center until the Japanese bubble economy collapsed in the early 1990s, has slipped back. The dominance of financial and business services in the London economy has been an important key to understanding the changing nature of the city over this period, and the global financial crisis of 2008, which hit London hard, is likely to have an equally important effect over the next few years.

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