Income inequality and housing costs

Date 1 September 2017
Date updated 6 October 2017

Housing costs and income inequality

What does this chart show?

This graph looks at the 80:20 ratios for London and the rest of England, before and after housing costs. Inequality in London is higher after housing costs are accounted for. The 80:20 ratio is 3.7 after housing costs, but 2.7 before housing costs. It has also fallen less over the course of the decade after housing costs: down 0.2, compared with 0.4 before housing costs.

The increase in inequality in London once housing costs are accounted for is large compared with the rest of England. The ratio is 0.3 higher after housing costs in England at 2.6, compared with 1.0 higher in London. In this way, London’s high housing costs contribute to its higher levels of inequality. Part of the reason for this is that those with higher incomes are more likely to own their own home, which tends to cost less than renting.