New research provides dramatic evidence for London becoming an increasingly unequal city. Between 1980 and 2010, middle income households in London declined from 65% of the total to 37%, while poor households increased from 20% to 36% and wealthy households increased from 15% to 27%. That's right: London's 'middle' has gone from two-thirds to one-third of the city in three decades, and there are now almost as many poor people as those who are comfortably off.
This research, done by Professor Danny Dorling and Dr Benjamin Hennig for Trust for London, used data from the census and the most recent Rowntree Foundation poverty survey to reach these conclusions. They define 'poor' as not being able to afford necessities and 'wealthy' as qualifying for inheritance tax (read more about the methodology). It seems to confirm what many of us have thought for a while — that we live in a divided city, where the rich are getting richer and the rest of us are increasingly being squeezed out. Worse, as the data is several years old and doesn't take into account the most recent effects of austerity and property price rises, the situation is likely to only have got worse.
Despite what we all think about Kensington and Chelsea, outer London actually has the highest proportion of wealthy residents. That's mainly because it's where people are more likely to own property and have wealth fall into their laps from rising house prices. Richmond, for example, has seen its wealthy households grow by a third, the largest rise in London. A third of households in outer London are 'rich', compared with 19% in inner London. Inner London has more poor households (43% compared with 31% in outer London).
Why are these changes happening? Well, the one already mentioned is a biggie — the concentration of wealth into the hands of those who were lucky enough (read: being born at the right time) to take advantage of the property market before it went completely batshit. Those same property prices have also affected the other end of the scale, with people who might well have been in the middle a generation ago now paying out more than they can afford in rent, as the minimum wage proves woefully inadequate to cover the costs of living in London. (In 2013, nine out of 10 new applicants for housing benefit in London were working; around a quarter of all London households receive housing benefit.) It's two ends of the spectrum being pulled apart, creating two separate cities in one. Which isn't what London's supposed to be about.