Are London’s days as a diverse city, home to people of all ages and backgrounds, coming to an end? This is the question new research on gentrification across London from Trust for London and WPI Economics is hoping to shed more light on.
The analysis identifies 53 neighbourhoods that have experienced significant gentrification in the last 15 years. This accounts for more than a quarter of the areas that had the lowest average incomes in 2012.
It shows that families and low-income Londoners may be being priced out of their neighbourhoods, and ultimately out of London.
Demographic shifts... reveal a significant decline in Black communities, as well as a drop in the number of families with children
The 53 neighbourhoods examined cross the entire capital, demonstrating the widespread impact of London’s housing crisis. Particularly intense pockets of gentrification are visible in boroughs such as Tower Hamlets, Southwark and Brent.
These neighbourhoods saw their average incomes increase by 11% from 2012 to 2020. Over the same time period, the rest of London’s income barely changed.
Demographic shifts in these areas reveal a significant decline in Black communities, as well as a drop in the number of families with children. At the same time, these neighbourhoods have seen a rise in the number of couples without children and adults in their 30s and 40s.
This aligns with a broader decline in primary school applications across the capital. The borough of Southwark, home to several of the 53 identified gentrified areas, has seen a 32% drop in primary school applications over the past decade.
House prices in these 53 neighbourhoods have soared by more than 250% between 2010 and 2023, compared to a 200% increase across the rest of London.
This analysis focuses on the areas with the lowest 20% of incomes in 2012. Other areas may have experienced gentrification earlier or started with relatively higher incomes, meaning the true number of neighbourhoods experiencing gentrification is likely to be much higher.
It was carried out in response to London’s dropping poverty rate which, for the second year in a row, fell to the lowest level on record. At the same time the capital is experiencing sky-rocketing levels of homelessness, food bank usage and costs of living.
The findings highlight the urgency of investing heavily to tackle London’s housing crisis. In the long-term through a once-in-a-generation investment in new social homes, and in the short term by permanently linking LHA rates to the cost of living, so that more homes are affordable to Londoners on the lowest incomes.
As well as pricing out its residents, the housing crisis is holding London’s economy back. Last year, new research from NERA, G15, Trust for London and the Mayor of London showed that making housing more affordable by just 1% would bring £7.3bn in benefits over 10 years.
Well be publishing more research in partnership with UCL later in the year into gentrification, using individual-level analysis to explore how people are moving in and out of London and how patterns are changing.
Manny Hothi, chief executive of Trust for London, said:
“This research points to something that many Londoners have suspected for years—the city is becoming increasingly unaffordable for low-income families. We’re witnessing families and long-standing communities being priced out on a scale we haven’t seen before.
“London's diverse blend of communities is what makes it one of the best cities in the world. But the current trend shows the city is at a tipping point, at risk of being a homogenous place where only people above a certain income bracket can afford to be.
“If we want London to be a city where people from all backgrounds, of all ages, can live and thrive, urgent action is needed to address the affordability crisis.”
Guy Weir, Head of Data Insights at WPI Economics, added:
“Getting under the skin of local area data is key to understanding what’s happening beneath the headlines. As this analysis shows, several London neighbourhoods changed dramatically between 2012 and 2020, with the available data pointing towards a displacement of those on lower incomes.
“While the overall poverty rate has declined across the capital, analysis like this highlights that beneath the surface, communities across the city are struggling to afford to live in London.”
