New figures show more than a quarter of Londoners living in poverty

Trust for London warns that soaring rents and low pay are pushing people into homelessness


1.2 million Londoners in working families now live in poverty, according to the New Policy Institute (NPI)’s annual London Poverty Profile. The report, funded by the Trust for London, looks at the role of income, inequality, housing, work, and education in the capital.

The 2015 edition highlights the rise in in-work poverty, which has increased by 70 per cent over the last decade. The research shows that the number of low-paid jobs in London has risen for the fifth consecutive year, meaning almost one-in-five jobs are now paid below the London Living Wage

The number of low paid jobs is up for the 5th consecutive year in London, with almost 1 in 5 jobs paid below the London Living Wage (£9.15 per hour). As well as low pay, more and more Londoners are finding themselves in low-quality jobs, with the number of temporary and involuntary temporary contracts at a ten-year high in the capital.

This is part of the reason why despite falling unemployment, 27 per cent of Londoners are still in poverty, compared to 20 per cent in the rest of England.

The other big problem is housing, with the NPI warning that the private rental sector ‘needs urgent attention’. There are 860,000  private renters in poverty, more than in any other type of tenure.

Worryingly, the number of children in poverty in private rented housing has more than doubled in ten years to reach 260,000. The facts about rent prices in London are well documented but they bear repeating: rents have increased by 19 per cent over the last five years, making the average private rent £1,600 per month.

With almost 20 per cent of people earning less than £9.15 per hour, there simply aren’t enough homes that realistically match up to London incomes. With a shortage of affordable housing, the only option for many low-income households is private renting.

NPI describes this move as a ‘gateway to homelessness’ for some families, and says that the majority of homelessness acceptances in the last five years have been due to the end of a private tenancy.

Today’s report points out that the targets set for affordable housing in London are frequently missed – the latest target was missed by 40 per cent. Where the government planned to build 13,200 new affordable homes, they built only 7,700.

Mubin Haq, director of Policy and Grants at Trust for London, warned that George Osborne’s new nation living wage will not be enough to compensate working people paying sky-high rents:

“Whilst 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 £9.15 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.”

Ruby Stockham is a staff writer at Left Foot Forward

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