What do we need to thrive in London?

What do we need to live in London? Not just to survive, but to have a decent, dignified standard of living.

For the last decade, we’ve been addressing this question through the Minimum Income Standard for London. Our latest research paints a picture of a city where this decent, dignified standard of living we all deserve is out of reach. In London, accessing affordable, appropriate, secure housing is a challenge for so many households. Our research suggests this problem is growing.

What is the Minimum Income Standard for London, and why does it matter?

MIS research is carried out by speaking to groups of members of the public in London, to determine what people think is needed for a minimum standard of living. These discussions cover needs in and outside of the home, as well as what are reasonable assumptions when it comes to housing itself.

At its core, this living standard is about being able to cover essential costs – food, clothes, shelter. But it is about more than just these things. It’s about being able to do the things that make us feel a part of where we live, part of society. It’s about being included, not excluded. In Mayor of London, Sadiq Khan’s words, it’s about making sure that ‘all Londoners … have the opportunity to get on in life … to not just survive, but to thrive’.

The housing crisis & living standards

There would be little disagreement that housing is a critical ingredient when we’re thinking about what’s needed to survive – let alone thrive. But housing is about more than just having survival, having a roof over your head. It provides security, it roots households in locations and communities, it is the bedrock of living with dignity.

And yet, accessing affordable, appropriate, secure housing is a challenge for so many households.

Our latest Minimum Income Standard (MIS) for London research indicates that this challenge is growing not diminishing, particularly for households with children.

Up until 2024, the groups we spoke to said that households with children would be able to access social housing in London if they needed it. And so social rents were used when looking at the cost of living with dignity in the capital.

In the latest research, this was no longer the case. The groups we spoke to were clear that because of a limited social housing stock, families with children would not be able to access social housing. This means that the cost of a minimum living standard in London for households with children now includes the cost of renting privately.

This shift from social to private rents reflects the housing challenges facing London:

• In 2023-24, there were more than 330,000 households on the waiting lists for social housing in London, an increase of 85,000 from 2019-20.
• Waiting times for larger properties, more suitable for households with children, are substantially longer than for smaller properties. In 2022-23, households could expect to wait 2 years, 3 months for a one-bed property; the wait for a home of four or more bedrooms was 6 years, 3 months.
• Against this backdrop, only 5% of private rental properties in London were affordable to people relying on LHA.
• In 2021, 30.1% of households in London were living in the private rented sector, the highest proportion since 1971.
• But the private rental market is shrinking, with properties at the lower end of the market – those that are more affordable – being lost at a faster rate than more expensive rental properties.

What does this mean for dignified living standards in London? Unsurprisingly, building private rather than social rents into the cost of a minimum living standard increases this dramatically.

For a couple with two children, one pre-school and one in primary school, social rent for a 3-bedroom property would be £182 a week in Inner and Outer London. Rent for a 3-bedroom property at the lower end of the private rental market would be £487 a week in Inner and £377 a week in Outer London. This adds a substantial amount each week to what is needed to live with dignity: £305 a week in Inner London and £195 a week in Outer London.

In 2024, this means that households with children in Inner London need over 50% more than the same households living in towns and cities in the UK; in Outer London they need over a third more.

With properties at the lower end of the private market disappearing and with only a limited proportion of homes being affordable to those relying on LHA, the reality is that many households will be forced into inappropriate housing. Housing that is too small, poor quality, far away from their children’s schools, from key services and from the communities where families have roots and connections.

It has become a bit of a cliché to talk about the crisis in housing, and it is all too easy for this to become a rather abstract discussion about bricks and mortar, reduced to targets that are routinely missed.

We need more conversation about the value of housing, not as an asset but for what it is that housing provides: the critical role it plays in providing social security, its role in people’s health and wellbeing, in building stronger, intergenerational communities.

There is much that needs to be done to rebuild our social security system so that it supports those who most need it. And we need a bold and ambitious child poverty strategy that gives all children opportunities.

Housing has a key role to play here, particularly in London where so many low-income households are being pushed into insecure, overcrowded, unsuitable properties.

In the Spending Review last week, Rachel Reeves acknowledged that any plan to tackle our housing crisis ‘must include social housing’, and that the ‘security of a proper home’ for all is absolutely critical to improving living standards.

But in order to truly address the ’crisis’ the announced additional investment needs to deliver good quality homes with social rents that are genuinely affordable to those who need it, built in the right places.