The fall of London, and why I think the crash is the opportunity

This is an opinion piece. It describes what I think might happen, not what will happen.

I have watched London lose things for a few years now. The Arm listing went to New York, and the FT reported that the UK regulator was blamed for it. CRH moved its primary listing to New York and then left London entirely. Wise, one of the UK's best technology companies, won a shareholder vote to move its main listing to New York. Smurfit Westrock announced it would delist from London in May; Ferguson cancelled its secondary listing in June. The FT counted 88 companies leaving the main market in a single year against 18 joining, and called it the biggest exodus since the financial crisis. Downing Street has been calling in private equity bosses to talk about it, which is not what a confident capital does.

So yes, the fall is real. London is losing its position as the place where a serious company must be listed. The reasons are well documented: a smaller pool of domestic buyers after pension funds moved out of UK equities, a valuation gap with the US that boards find hard to justify to their shareholders, and a regulator that companies say is slow. Euronext's chief was happy to call it a London problem.

Where I part ways with the gloom

Here is the thing I keep coming back to. Markets do not bottom when problems get fixed. They bottom when everyone agrees the problems cannot be fixed. London is close to that point, and I think there is one more leg down before it gets there.

My view is that London goes through something that looks like a crash: a stretch where a few more household names leave, a big listing fails, the pound wobbles, and the commentary turns from worried to contemptuous. That is the painful part. But it is also the moment the reaction starts, and I think the reaction is positive for investors who are paying attention. Three reasons.

1. The assets are already cheap, and getting cheaper does not make them worse

The FT asked the obvious question years ago: if the UK market is cheap, why doesn't it go up? The honest answer is that there was no forced buyer. A crash changes that. Cheap stocks that fall further attract the buyers who do not care about sentiment: private equity, foreign acquirers, and the companies themselves through buybacks. The mining sector is a preview. London has been losing its grip on mining listings, yet Glencore looked hard at moving and decided to stay because a New York listing would not have delivered more value. Some of the exodus is fashion. Fashion reverses.

2. Policy only moves under pressure

The UK has known what it needs to do for years. It has been slow because the pain was gradual. Mansion House reforms have been criticised as delivering tiny gains, and ministers have had to threaten legislation to get pension funds to buy British assets. A visible crash removes the option of doing this slowly. Stamp duty on shares, listing rules, pension mandates: the things that get argued about for a decade get done in a year when the alternative is humiliation. Investors who buy before the policy response, not after, capture it.

3. The index is not the economy

The FTSE 100 crossed 10,000 for the first time at the start of this year after rising more than 20 per cent in 2025, and it has handled 2026 far better than the UK economy has. That is because its biggest members earn abroad in dollars and benefit from the same commodity and energy volatility that hurts British households. A crisis of confidence in London as a venue does not automatically mean a crisis in the earnings of the companies listed there. The gap between how a company is priced and how it is doing is where returns come from.

What I would actually do

I am not saying buy everything the day the headlines turn ugly. I am saying decide now what you would want to own if London got 20 per cent cheaper, because in that moment you will not be thinking clearly. Businesses with global earnings and a London-only discount. Owners of the infrastructure that does not leave: exchanges, clearing, property in the right postcodes. And, if the reforms land, the mid-caps that domestic pension money is finally forced to buy.

The FT ran a piece arguing the gloom about the London market is overdone. I would go one step further. The gloom is not yet overdone enough. When it is, that is the buy signal.

Nothing here is investment advice. I am describing a thesis, and I might be wrong about the timing, the depth, or both.