Housing

Date 1 September 2017
Date updated 22 August 2018
Overview

Housing is central to understanding poverty and inequality in London. Housing costs push many Londoners into poverty and are a significant contribution to the fact that London's poverty rate is higher than in the rest of England.

The indicators in this topic look at the nature of housing in London: the tenures people live in; the cost and quality of housing; and evictions.

Average rent in London is more than twice the average for England, and has been increasing at more than twice the national rate over the last 5 years. The average lower quartile market rent in London is £1,250 per month, compared to £495 in England. The affordability of rent varies significantly between boroughs: Kensington & Chelsea and Westminster are by far the least affordable for low earners. 

Partly as a result, the number of people in the private rental market who are in poverty has risen enormously in the last decade. 447,500 private renters were in poverty in 2005/2006, compared to 962,000 now. More private renters now live in poverty than social renters (though, as a percentage, the proportion of social renters in poverty remains higher). 298,200 children in the private rental market were in poverty in 2015/2016. In 2005/2006, that figure was 106,600.

Only 24% of housing completions in London were social or 'affordable rent' or shared ownership, in the three years to 2015/2016. This is a reduction from the three years to 2013/2014, when 34% of completions were affordable. It also masks enormous variation between boroughs from 1,830 in Tower Hamlets to a net reduction in two boroughs, Bexley and Harrow: as there were more affordable homes which were demolished or converted into other forms of accommodation than those which were built.

Housing: Indicators

Housing benefit by tenure & work status

This graph shows the number of working-age housing benefits claimants by whether they are in the social or private rented sectors and by whether they are in work or not. Housing benefit is a means-tested benefit which helps those living in rented homes (both in the social and private sector) meet their housing costs. Those claiming an out-of-work benefit are automatically entitled but it can also be claimed by those in work on a low income and by pensioners.*

In 2017 there were 590,000 working-age families claiming housing benefits. The number of families claiming housing benefits has been falling since 2013, when it peaked at 680,000. The social rented sector accounted for 380,000 (or 65%) of claimants and the private sector for 210,000 (or 35%).

The area in which there has been a significant change is the number of housing benefit claima…

Tenure trends

After large changes in the tenure mix in the previous decades, the past five years have not seen significant changes in the proportion of Londoners living in each tenure.

Levels of private renting in this decade are the highest seen since the 1970s. In 2016, 880,000 or 27% of households lived in private rentals. This is still far below the proportion that were private renters in the 1960s (around 45%).

The rise in the share of households living in the private rented sector over recent decades was simultaneous to a fall in social renting over the 1980s and 1990s. In 2016, 740,000 households or 23% lived in this tenure. The peak for this tenure occurred in the late 1970s and early 1980s, before Right to Buy was introduced. In 1981, 35% of all London households lived in social housing.

The proportion of households that own their home rose eve…

Average rents

The average rent for a two-bedroom private rented house in London is £1,730 compared with £820 across England. Two-bedroom homes to rent in London at the bottom quarter of the market are £1,250 a month – more than twice the average for England at £500.

The differences between the capital and the rest of the country are less pronounced for social renters. For registered social landlord (housing association) tenants, the average rent on a two-bedroom home in London at £550 is £150 higher than in England as a whole. For tenants of local authorities, London is £110 a month more expensive at £470. Social rents for two-bedroom homes are less than a third the cost of private rents in London.

* In the month up to Dec 1st, 2016 (not seasonally adjusted). 

The growth in private rents over the past five years has also been considerably higher in Lond…

Eviction rates

The total number of landlord and mortgage possession orders has risen in the five years to 2015/16. Mortgage possession orders have fallen significantly over the past decade, from 7,400 down to 900. Since the financial crisis, mortgage holders have benefited from extremely low interest rates and lender forbearance policies* which have probably contributed to the fall in mortgage possession orders.

The overall increase is therefore due to a significant increase in landlord possession orders which made up 97% of total orders in 2015/16. The rate of landlord possession orders was higher in 2015/16 at 15 per 1,000 rented households than five years previously, at 13 per 1,000 households.

This is particularly accounted for by the rise in accelerated possession orders, more than doubling from 7,700 to 16,000. These orders are predominately used b…

Landlord possession orders by borough

This map shows how eviction rates for renting households differ across boroughs. Enfield had the highest eviction rate in 2015/16 (and 2014/15) of 30 evictions per 1,000 renting households.  Barking and Dagenham was the next highest with a rate of 29 while Camden had the lowest rate of 5 evictions (per 1,000 renting households). 

The highest eviction rates are mostly concentrated in Outer London: nine of the ten boroughs with the highest eviction rates are in Outer London.  Seven of the ten boroughs with the highest eviction rates in 2014/15 are still in the top ten in 2015/16. Waltham Forest, Barnet’s and Bexley’s eviction rates declined (by 3 evictions per 1,000 renting households for Waltham forest and Barnet, and 1 eviction per 1,000 renting households for Bexley), and they are no longer in the top ten this year.  Barking and Dagenham…

Rents and affordability

This shows how private rents vary by borough and how this compares with earnings. The bars show monthly rent levels* for a two-bedroom property and the line shows this as a percentage of gross full-time earnings in the borough. As this report is concerned with those at the bottom of the income distribution we look at the lower quartile (bottom 25%) for both earnings and rents. This is why the average rent is lower than the figure given in the Average rents indicator.

In 2015–16 in Inner London, the rent was £1,500 a month, while in Outer London it was £1,180. In England as a whole it was less than half as much as Outer London, and a third of the Inner London level, at £500 per month.

The highest monthly rent was £2,400 in Kensington & Chelsea. Westminster is the only other borough with monthly rents above £2,000, at £2,100. The lowest …

Local housing delivery

‘Affordable’ homes are available at sub-market costs to households whose needs are not met by the market.*  There were 21,500 affordable home completions in London in the three years to 2015/16. This represents 24% of all housing completions during that period. A similar number of affordable homes completed were in Inner (10,800) and Outer London (10,700).

This graph shows that in the three years to 2015/16, Tower Hamlets delivered the most affordable homes of any borough at 1,830 (29% of completed homes). Waltham Forest was the borough in which affordable homes were the largest proportion of new homes at 47%. However, this is because this borough completed relatively few market homes, rather than a high number of affordable homes. 

Bexley delivered the fewest affordable homes. The borough actually had a net loss of social rents as more w…

Overcrowding 2

 In 2014/15, there were 250,000 households in London that were overcrowded by the ‘bedroom standard’ which assesses the number of bedrooms needed according to the size and composition of households. Of these overcrowded households, there were 50,000 households in owner-occupation and 100,000 households in each of the private rented sector and social rented sector. This represents 13% of the social renting households in London, 11% of private renting households and 3% of owner-occupiers.

Levels of overcrowding in London are more than twice as high as the rest of England for every tenure. In the rest of the country, the rates of overcrowding are 1% in owner-occupation, 4% in the private rented sector, and 5% in the social rented sector.

While rates of overcrowding in London are higher now than a decade ago, current levels of overcrowding in …

Poverty over time

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This graph looks at the changing picture of poverty in London. On average in the three years to 2015/16, 27% of people in London were in a household in poverty after housing costs (AHC). This is equivalent to around 2.3 million people. 21% of people were in households in AHC poverty in the rest of England.

On this after housing costs measure, the poverty rate in London has fallen slightly: down two percentage points from 29% in 2007/08. The number of people in poverty in London have been largely unchanged over the last six years, although this is in the context of a growing population. Between 2008–11 and 2013–16, the increase was less than 20,000 and not statistically significant.

The BHC measure includes housing benefits as income and does not deduct rent. In London, where housing costs are higher, housing benefits can make u…

Housing tenure and poverty

This graph looks at the number of people in poverty in each housing tenure over time. In the three years to 2015–16, 960,000 private renters, 810,000 social renters, and 490,000 owner-occupiers were in poverty. As a proportion of the total for each group, this means 39% of private renters, 46% of social renters, and 12% of owner-occupiers were in poverty.* This was a remarkable shift in poverty tenure in London, given that the private rented sector’s poverty numbers were still the lowest of the three in 2007–10.

These three tenures have followed different trends in the last few years. In the last five years, there has been a negligible change in the number of social renters in poverty, an increase of 160,000 private renters in poverty, and a fall of 130,000 owner-occupiers in poverty.

There was a large increase in private…

Children in poverty by housing tenure

This graph looks at which housing tenure children in poverty live in. Over the three years to 2015/16, there were around 300,000 children living in poverty in the private rented sector, and 290,000 living in poverty in the social rented sector. There were far fewer living in owner-occupation, at 70,000.

However, the numbers of children in poverty in each of these tenures have followed very different trajectories. The number of children in poverty in the social rented sector fell to 240,000 in 2009–12, but has since increased again. In contrast, there were fewer than 100,000 children in poverty in private rented accommodation in the late 1990s. Since 2004–07, this number has roughly tripled.

The number of children in poverty in owner-occupation has been falling in recent years, by around 40,000 since 2011–14.

Expressed as a proportion, over …

Housing costs and income inequality

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.…

Social Housing delivery breakdown

This graph shows the breakdown between the number of social and affordable rented homes delivered in each London borough. “Affordable rented housing” is defined in this graph as having rent which is 80% or below of market value. This is the definition of affordability which was used in the London Plan in 2017 and in the current draft London Plan. 

Social housing is distributed by the council’s allocation scheme, owned and managed by social landlords, and offers low rent which is designed to be genuinely affordable to people on low incomes. It is almost always more affordable for those on low income than “affordable rented housing” from a private landlord.

This graph shows that 8,100 social rented homes were delivered between 2013/14 and 2015/16, compared to 4,900 “affordable rented homes”. Greenwich delivered the most social rented ho…