Housing

Affordability & need of housing in London

Date 1 September 2017
Date updated 20 April 2020
Overview

London's Poverty Profile is divided into five themes: 

  • People; 
  • Living standards;
  • Housing;
  • Work, worklessness and benefits; and 
  • Shared opportunities. 

Each one provides insights into a range of different indicators of poverty and inequality across London, drawing comparisons over time, between different boroughs and with the rest of the country.

The Housing theme shows the importance of housing in understanding poverty and inequality, in particular, comparing measures of poverty before and after housing costs. This demonstrates the significant challenge of housing affordability faced by Londoners. The theme also assesses wider measures of the extent to which housing fails to meet the needs of Londoners, including those who are homeless.

Housing: Indicators

People sleeping rough in London by nationality (2011/12 - 2018/19)

The number of people sleeping rough in London has more than doubled in a decade. Some 8,855 people were recorded sleeping rough in the capital in 2018/19 compared to 3,472 in 2008/09. 

Most people sleeping rough are white, although the number of BAME people sleeping rough has risen faster than the number of white people. Of the people whose nationality is known, around half are British citizens, with EU citizens making up most of the rest. A large majority (84%) of people sleeping rough in London are men.

The majority of rough sleeping takes place in Central London. This has been the case for some time, but the proportion of people sleeping rough who do so in Central London has fallen from over two thirds in 2011/12 to just over a half in 2018/19. This has been primarily driven by a rise in rough sleeping in East London.

This information co…

People seen sleeping rough by outreach workers by borough (2018/19)

The number of people sleeping rough in London has more than doubled in a decade. Some 8,855 people were recorded sleeping rough in the capital in 2018/19 compared to 3,472 in 2008/09. 

Although the majority of rough sleeping continues to take place in Central London, with the highest levels recorded in Westminster and Camden, the proportion of people sleeping rough who do so in Central London has fallen from over two thirds in 2011/12 to just over a half in 2018/19. This has been primarily driven by a rise in rough sleeping in East London, with Newham now the borough with the third highest numbers of people sleeping rough. 

Most people sleeping rough are white, although the number of BAME people sleeping rough has risen faster than the number of white people. Of the people whose nationality is known, around half are British citizens, with …

Number of households London boroughs owe homelessness duties to by type of duty (2003/04 - 2018/19)

The nature and scope of duties owed by local authorities to homeless households changed considerably with the introduction of the Homelessness Reduction Act (2017) (HRA), which came into force in 2018. Whereas previously local authorities only had statutory duties towards households that were classed as being in “priority need” because, for example, they contained children or a pregnant woman, the HRA puts the following duties on local authorities:

  1. Prevention duty: Local authorities owe prevention duties to help stop households at risk of homelessness losing their accommodation. 
  2. Relief duty: If a household is homeless, the local authority owes them a relief duty to provide some sort of accommodation. 
  3. Main duty: The main homelessness duty to provide accomodation (which until 2018 was the only statutory duty owed to homeless households) com…

Homelessness duties owed by London boroughs (2018/19)

London boroughs are required by law to either provide accommodation to homeless households (the main homelessness duty), work to stop households becoming homeless (the homelessness prevention duty) or relieve homelessness when it does occur (the homelessness relief duty).

  • The extent and nature of homelessness duties owed by different boroughs varies significantly. Brent was the borough that owed the most households a relief duty, at 3.19 per 1,000 compared to the London average of 1.57. At 1.39 per 1,000, Hammersmith and Fulham owed the most households the main homelessness duty, and Haringey was the borough owing the most prevention duties - 4.3 per 1,000 households.

Temporary accommodation types in London (2002-2019)

Local authorities, including London boroughs, have legal duties to provide accomodation to people who are homeless. Whilst they are waiting for a permanent solution - such as a home provided by a housing association - local authorities must house them in temporary accommodation such as nightly accommodation, the private rented sector or bed and breakfasts. 

For every 1,000 households in London, 16 are living in temporary accommodation. This compares to just 1.4 households for every 1,000 in the rest of England. Overall, this means that more than 56,000 households in London were in temporary accommodation in 2019, an increase of 30% compared with five years ago. The most prevalent form of temporary accommodation was in the private rented sector.

Proportion of households in temporary accomodation in London boroughs (2018/2019)

Local authorities, including London boroughs, have legal duties to provide accomodation to people who are homeless. Whilst they are waiting for a permanent solution - such as a home provided by a housing association - local authorities must house them in temporary accommodation such as nightly accommodation, the private rented sector or bed and breakfasts. 

For every 1,000 households in London, 16 are living in temporary accommodation. This compares to just 1.4 households for every 1,000 in the rest of England.

Every borough in London has a higher proportion of households living in temporary accommodation than the average in the rest of England. 

Newham has the highest rate of households in temporary accommodation (44.5 per 1,000 households). Other boroughs with high rates include Kensington and Chelsea (30.5 per 1,000 households) and Harin…

Tenure types of London households over time (1961-2018)

The proportion of London households which are owner-occupied has increased from the 1960s. Rates of home ownership peaked at 57.2% in 1991, before stabilising between 49% and 52% in the last decade.

A similar trend is found amongst households that were social rented, which peaked in 1981 at 34.8%. In the following decades, the proportion of social rented households has slowly fallen to 22.3% in 2018.

The trend for private rented households went in the opposite direction in the 1980s until the early 2000s. Starting at 45.5% in 1961, the proportion of private rented households was its lowest point at 13.9% in 1991, after which, the proportion increased rapidly until 2011 (26.4%) and is now 25.8%.

Monthly rent by sector in London and England (2018/19)

Housing affordability in London has diminished as rents in the private rented sector have increased by almost 30% since 2008, despite mostly stagnant wages. This means that, in every London borough, the average rent for a one-bedroom house or flat on the private market, is at least 30% of median pre-tax pay in London. 

Affordable and social rents are part of the solution, with the typical rent on a one-bedroom socially let property being £430 a month compared to the typical private rent of £1,280. However, even these types of accommodation are more expensive in London than in the rest of England - £100 more a month so for social rent and £220 more for affordable rent - and have been increasing faster than both inflation and earnings. 

The three types of rented accomodation considered here are Private Rented, Affordable Rented and Social Re…

Types of court repossession in London (2003-2019)

London has a higher rate of court-ordered home repossessions than the rest of England, with 74% more repossessions per 1,000 households in the capital than the rest of the country (1.04 per 1,000 in the rest of England, compared to 1.81 per 1,000 in London).

However, standing at 6,431 in 2019, the overall number of repossessions in London has fallen by more than 60% since its recent peak in 2015 (16,888). This fall has primarily been driven by the reduction in landlord accelerated repossessions - the route taken by private landlords to regain possession of a property after a Section 21 (a so called “no fault”) eviction. This type of repossession is now less than a third of the level it was five years ago. 

Repossessions for people with mortgages have almost disappeared in London over the past decade, falling from over 3,604 a year in 2009 …

Total repossessions by county court bailiffs in London boroughs (2019)

The rate of court-order home repossessions varies significantly between London boroughs.

The boroughs with the highest rates of repossessions are:

  • Newham (3.39 per 1,000 households - 87% higher than the London average);
  • Barking and Dagenham (3.22 per 1,000 households - 78% higher than the London average); and
  • Greenwich (2.96 per 1,000 households - 64% higher than the London average).

Whilst the boroughs with the lowest rates of repossessions are:

  • The City of London (0.58 per 1,000 households - a third of the London average);
  • Richmond upon Thames (0.59 per 1,000 households - a third or the London average); and
  • Camden (0.75 per 1,000 households - 41% of the London average).

All but six London boroughs have repossession rates higher than the average in the rest of England, excluding London.

Rent for a one-bedroom dwelling as a percentage of London median gross pay, by London borough (2018/19)

To rent an average one-bedroom house or flat in London on the private market, someone on the median pre-tax pay in London would need to spend almost half (49%) of that pay. In contrast, they would need to spend less than a quarter (24%) for the average one-bedroom house or flat in England on the private market.

In every London borough, the average rent for a one-bedroom house or flat on the private market is at least 30% of median pre-tax pay in London. The average across the capital is that a one-bedroom dwelling cost the equivalent of half the gross-median pay in London.

The least affordable boroughs are Westminster and Kensington and Chelsea in the centre of London, requiring up to three-quarters of median pay to rent one-bedroom. Outer London boroughs including Bexley, Havering and Croydon have the lowest average rents of between 30% a…

Average annual net housing completions in London by planning authority (2016/17 - 2018/19)

On average, 29,000 net completions were added to the housing stock in London between 2014/15 and 2017/18. The vast majority (85%) were for the private market and an average of only 700 net completions were made for social rented properties. 

The boroughs completing the most new homes include Tower Hamlets, Croydon and Newham. However, boroughs vary greatly in both their size and in the availability of development opportunities. Boroughs are set targets in the London Plan for how many homes they should be delivering each year and this figure gives a sense of the potential for new buildings in each borough. 

Whilst the targets in the London plan are not the only measure by which to assess the pace of new building in London, with fewer than ten boroughs meeting their existing targets (set in 2016) and the city-wide target not being met, it is…

Proportion of households in London that are overcrowded by tenure (2007/08 - 2017/18)

The extent to which housing in London meets households’ needs can be measured in a range of ways. One of those is to look at overcrowding. Here this is defined using the 'bedroom standard'. For example, a home is considered overcrowded if two or more people of a different sex (who are not a couple) over the age of 10 need to sleep in the same room.

On this measure, 8% of households in London are overcrowded.

Within this, social rented housing has the highest proportion of households in overcrowded conditions, with 14.7% overcrowded. This contrasts with just 2.6% of owner-occupied households. 

Overall, overcrowding has remained at broadly consistent levels in London across time, with 8% of households overcrowded in 2017/18 compared to 6.8% in 2007/08.

Proportion of people in poverty over time after housing costs (1996/97 - 2017/18)

More than a quarter (28%) of Londoners live in households that are in poverty (after housing costs - AHC), meaning that 2.4 million Londoners live in poverty. The poverty rate (AHC) in London is 7 percentage points higher than in the rest of England 

The proportion of households in poverty after housing costs (AHC) was relatively stable between 1996/97 and 2017/18:

  • In London poverty rates varied between 26% and 30%; and
  • in the rest of England poverty rates varied between 20% and 24%.

Poverty rates (AHC) in London have been higher than in the rest of England for at least the last two decades.

In contrast, poverty rates before housing costs (BHC) over the last 20 years have been more similar between London and the rest of England. Current rates of BHC poverty are higher in the rest of England (17%) than in London (15%). Again, this shows the la…

Number of people in London in poverty by housing tenure (2004/05 - 2017/18)

Those living in the private-rented sector have both the highest rate and level of poverty in London. Over 900,000 private renters are in poverty in London, compared to 560,000 owner occupiers and 890,000 social renters (those who rent from local authorities or Housing Associations).

The poverty rate for those in the private-rented sector is 39%, compared to 24% for owner occupiers and 37% for social renters. 

The current situation reflects a major shift in the nature of poverty in London. In the last decade, the number of Londoners in poverty living in the private-rented sector has increased by 90%. Poverty rates for this group have also increased from 24% in 2007/08 to 39% in 2017/18.

Number of children in poverty by housing tenure in London (2004/05 - 2017/18)

Since 2004/05, the number of children in poverty in London who live in private rented accommodation has increased almost threefold to its current level of close to 300,000. The proportion of children in poverty in London who live in the private rented sector has increased from 17% of those in poverty in 2004/05 to 40% of those in poverty in 2017/18.

While the number of children in poverty in this group has increased, the poverty rate within this group has remained broadly flat; in 2004/05 the poverty rate for children in private rented accommodation in London was 56% and in 2017/18 it was 54%.

The number of London children in poverty living in the social rented sector fell sharply between 2004/05 and 2011/12 (falling by more than 100,000). However, numbers have risen again since then and the poverty rate amongst this group is still the hig…

Proportions of people in poverty before and after housing costs (2017/18)

The difference between poverty rates before and after housing costs shows how much of an impact housing costs have on poverty.

In London, poverty rates almost double when housing costs are accounted for (increasing the poverty rate from 15% to 28%). In the rest of England, the difference is much smaller (increasing poverty rates from 17% to 21%). This shows that, compared to the rest of England, high housing costs are a much more significant driver of poverty in London.

Put another way, this means that accounting for the high housing costs in the capital leads to over one million more people being judged to be in poverty.

Outcomes of homelessness initial assessment per 1,000 households (2018/19)

These indicators look at three types of statutory duties that local authorities owe households at risk of or experiencing homelessness:

  1. Local authorities owe prevention duties to help stop households at risk of homelessness losing their accommodation. 
  2. If a household is homeless, the local authority owes them a relief duty to provide some sort of accommodation. 
  3. The main homelessness duty to provide accomodation (which until 2018 was the only statutory duty owed to homeless households) comes into effect when the relief duty has failed and accommodation has not been secured. 

As a proportion of the population, more households are owed homelessness duties by local authorities in London than in the rest of England in 2018/19. Additionally, prevention duties are less likely to be successfully fulfilled in the capital, with 27% of households owed…

London poverty rates before and after housing costs (1996/97 - 2017/18)

The proportion of people living in poverty in London almost doubles when housing costs are taken into account (rising from 15% to 28%). 

This gap between before and after housing costs measures of poverty is much larger in the capital than in the rest of the country. For example, in 2017/18 the gap was 12 percentage points in London, compared to 5 percentage points in the rest of England. This demonstrates the fact that the cost of housing is a much larger driver of poverty in London than in the rest of the country.

The impact housing costs have on poverty in London has also increased since the early 2000s. For example, in 2003/04 the gap between before and after housing costs measures of poverty in capital was 8 percentage points, whilst between 2010/11 and 2017/18 the gap has been between 12 and 14 percentage points.

Housing costs as proportion of net income for households in poverty (2017/18)

Households living in poverty are spending a significantly larger proportion of their net income on housing costs than households not living in poverty. This is true both in London and in the rest of England. 

London households in poverty are estimated, on average, to spend 56% of their total net income on housing costs. In comparison, those living in households which are not in poverty spend just 14% on average. In the rest of England, a larger proportion of net income goes to housing costs for households living in poverty (37%) in comparison to households not living in poverty (9%).

Compared to the rest of England, both types of households in London are spending proportionally more of their net income on housing costs.