More and more, poverty and deprivation in London are driven by housing costs

As we head for next May’s crucial London mayoral election, the London Poverty Profile published by New Policy Institute and Trust for London shows both the depth of poverty in the capital and its changing nature.

Some crucial facts revealed by the study:

  • More than ever, the high level of poverty in London is closely associated with housing costs: 27% of Londoners are assessed as living in poverty after housing costs are taken into account, compared to 20% in the rest of England.
  • Poverty increasingly affects those in work: the majority of people in poverty are in a working family, and their circumstances are likely to deteriorate hugely if Osborne’s tax credit cuts go through. Despite low unemployment, 700,000 jobs in London pay below the London Living Wage, and the numbers are rising year on year.
  • The wealth disparity is huge, with the total wealth of a household on the 10th percentile amounting to only £6,300 compared to £1.1 million for a household on the 90th percentile.

The figures not only illustrate the importance of housing in driving people into poverty, but also how the housing market is changing. The biggest number of people in poverty are now in private renting (860,000), a transformation in the impact of tenure over the last 10 years. The number of children in poverty in the PRS has more than doubled in those 10 years. Not only are these families living in poverty, they are increasingly insecure: in 2014/15 there were 27,000 possession orders granted in London.

Homelessness is once again becoming a critical factor: 48,000 London households are living in temporary accommodation – three times higher than the rest of England put together. More than 15,000 have been placed outside their home borough and an estimated 2,700 have been placed outside London.

Government benefit chages are having a major impact: 10,500 families were affected by the overall benefit cap; if it is lowered as threatened a further 20,000 will be affected.
Given the current debate over tax credits, it is important to note that half of 0-19 year olds (1.1 million) in London live in a family that receives tax credits. Poverty is changing: the number of pensioners in poverty has declined over the last decade – by 30% – but the number of working age adults living in poverty has increased by 30%.

An excellent article this week by Alasdair Rae on The Conversation shows another way of looking at deprivation in London. Using clear maps, Rae compares the distribution of the 10% most deprived districts in London in 2004 with 2015. The index uses a broader range of indicators – relating to income, jobs, education, health, crime, housing and environment – than is used to measure poverty. Rae’s conclusion is that over the country as a whole, nothing much has changed – the places that were deprived in 2004 are still deprived today.

The major exception was London. In 2004, London had 462 of England’s 10% most deprived areas, by 2015 this had declined to 274. On the surface this might seem to be a good thing, but the conclusion is not that the deprivation has been eased to a major degree but that deprived people have been displaced, increasingly pushed by high housing costs and insecurity out to the suburban fringes – areas like Bromley show increases – or out of London altogether. Some boroughs, like Tower Hamlets and Hackney, show the biggest transformation. The conclusions will feed debates about gentrification in London and the need to protect traditionally mixed communities.

The big questions – what is London for? who is London for? what is our vision for its future? deserve to be widely debated as the mayoral election approaches.


(NB The full poverty profile data can be viewed here.)

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