Trading up or trading down? Residential moves and neighbourhood deprivation

The primary reason people move homes is to improve their life prospects – but it is too simple to think of this purely in terms of the physical or social characteristics of destination neighbourhoods. Quality of life can depend upon things like proximity to family, friends, work, and venues for socialising. London offers all of these and more.

It may be too simple to think of residential moves as part of a quest to move to a less deprived neighbourhood, but it is likely to be a factor.

These two novel maps combine several Consumer Data Research Centre (CDRC) datasets to show how neighbourhood deprivation factors into patterns of residential moves – for people moving from outside the Greater London boundary and for London residents moving within the city. To do this, CDRC uses a composite index of multiple deprivation (IMD) to compare scores for the origins and destinations of residential moves over a recent 20 year period (1997-2016).

Our first map considers people moving into Greater London from elsewhere in Great Britain. A striking pattern is that, for the majority of areas in London, incomers are actually 'trading down' to neighbourhoods that are more deprived than those that they left (shown in orange on the map). We define 'trading down' as a downward adjustment in the composite deprivation ranking of 10% or more – approximately equivalent to one decile on the IMD score expressed as a percentile. (This actually means that an 8% change would be the tipping point between deciles because of rounding effects.)

Trading down is particularly evident in inner London – allied to the tendency for people to establish households in city centres or inner cities, before moving to the suburbs as they filter up through the housing market. We can hypothesise that a significant majority of moves into London find themselves compromising on their choice of area - London's house prices and rental costs are extremely high compared with much of the rest of Britain, and our map provides testimony to the tough decisions about affordable neighbourhood destinations. But this is an assumption that would need to be established through further research. The circumstances of those moving into London’s suburbs from outside do, however, typically allow the more usual pattern of 'moving upmarket' to come into play.

The map also approximately mirrors the general patterning of neighbourhood deprivation across the capital indicating some uniformity in neighbourhood trading amongst movers. The absolute level of deprivation in any London neighbourhood is not necessarily a significant influencing factor in the decision to move there.

Our second map examines the residential moves of Londoners within the Greater London area – encompassing local moves between streets, between adjacent boroughs or indeed right across the capital. The same thresholds (10%+ percentile changes) are applied, but a very different pattern results. Once established in London, the price differential with other areas is much less relevant, and so a greater share of moves is between neighbourhoods sharing similar deprivation scores or indeed is to neighbourhoods that are less deprived. The map shows a distinctive 'ring' of neighbourhoods that are destinations for people moving from more deprived neighbourhoods in most parts of outer London. These movers fit the expected pattern of moving outwards from more central but less family-friendly inner city neighbourhoods to more spacious suburbs.

In order to create these maps, we used theCDRC Linked Consumer Registers to calculate numbers of residential moves across a 20 year period spanning 1997 to 2016. These securely held registers hold origin and destination data for Great Britain at high levels of geographical detail. Origin and destination locations were traced to Lower Level Super Output Areas (LSOAs) or Scottish Data Zone (DZs). These statistical areas typically comprise 10-30 unit postcodes each and circa 500 households.

We also constructed a harmonised index of multiple deprivation (IMD) by combining the 2019 national indexes for England and Wales and the 2020 index for Scotland. There are differences of detail in the ways that the indexes are compiled, and average levels of deprivation are likely to vary between countries, but this procedure offered a sufficient approximation for the purposes of examining deprivation changes between areas of London and the rest of Great Britain. We used the most recent IMD data, although of course relative scores between study areas may have changed significantly over our 20 year study period.

We made separate calculations for moves from the rest of Great Britain and moves within London based upon changes in harmonised deprivation score between the origins and destinations of all known moves. We defined significant changes as entailing percentile changes greater than plus or minus 10%. So, a mover who left an LSOA or DZ that was in the 3% of most deprived neighbourhoods in Great Britain (more deprived than 97% of all neighbourhoods) for a neighbourhood recorded in the 28th percentile would see a deprivation change of +25%. The changes in scores of those known to have moved multiple times over the 20-year study period are recorded following every move.

This index was created by Dr Justin van Dijk with assistance from Meixu Chen, and Professor Paul Longley of the Economic and Social Research Council Consumer Data Research Centre at University College London.