Poverty is higher in London than the rest of the UK — and it’s mainly affecting working families who rent their home from a private landlord.

That’s one of the findings from the latest London Poverty Profile — an independent study by New Policy Institute and Trust for London.

The study shows 27% of Londoners live in poverty, compared with 20% in the rest of England, and says the cost of housing is a key factor in London’s higher rate.

Poverty levels have not changed significantly in the last decade, but who is affected has altered dramatically. While 10 years ago the majority of people living in poverty were from workless homes, now more are in a working family. This number has risen 70% to 1.2 million in the last decade.

 

In addition, there are now more people in poverty in private rented housing than there are in social rented or owner-occupied homes. A decade ago, private renting was the least common tenure among those in poverty.

This means the vast majority of children in poverty are in rented housing (more than 530,000 — this has doubled in 10 years), half with a registered social landlord and half with a private landlord.

But it’s not all bad news: the number of unemployed adults is at its lowest level since 2008, at just over 300,000. The unemployment ratio in inner London has halved over the past 20 years reaching 5.6%, slightly higher than outer London (5.2%) and the rest of England (4.8%).

And education is another success story — the study found that in every London borough pupils receiving free school meals performed better on average at GCSE than their peers in the rest of England.

However, improving employment prospects alone has not been enough to lift people out of poverty in the capital. The number of low paid jobs is up for the fifth consecutive year in London, with almost 700,000 (18%) of jobs paid below the London Living Wage.

Poverty continues to move from inner to outer London. This is mainly due to more affluent people moving to inner and east London, says Mubin Haq, director of policy and grants at Trust for London.

For the first time, western boroughs such as Brent and Ealing are facing much greater pressures, while inner London boroughs in the east are improving; Tower Hamlets and Newham were among the boroughs with the highest levels of benefit claimants in the first report, and now sit mid-table.

It’s interesting to note that although there are emotive stories of families having to move miles away from their families and support networks, these cases are very much in the minority. In 2014, 28,000 housing benefit claimants in London’s private rented sector moved home, 3,000 fewer than in 2011. Among those who did move, around 10% moved out of London while 60% moved within their borough. These proportions have hardly changed since 2011.

Mubin Haq, director of policy and grants at Trust for London, said: “A record number of Londoners are in work, yet this has had little impact on the numbers living in poverty in the capital. Over two million are on a low income in London, with an increasing number in working families. On too many occasions work doesn’t pay enough, leaving people living in precarious situations.

“While the national living wage is welcome, it falls well short of what is needed to live on and the proposed 2020 rate is already below the London Living Wage of £9.35 per hour. Action is also needed on costs, particularly in relation to housing. The numbers of affordable homes being built is a fraction of what is needed. There is no shortage of solutions to these problems. We can tackle them if there is the political will and drive to ensure London is a city for all and not just the wealthiest. With the Mayoral Election next year, there is a great opportunity to make London fairer.”

This report defines poverty as people with a income 60% below the median.

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