The movement of people around London has changed the profile of various areas and had an impact on property markets around the capital.
MOVEMENT OF PEOPLEComparing Census data allow us to identify and track the changes to the social make up in different locations. More specifically, the 2001 and 2011 Census contain a socio-economic measure that has been constructed to classify people by their employment and occupational situation. It consists of eight categories ranging from '1. Higher managerial, admin and professional occupations' to 8. 'Never worked & long-term unemployed'. By creating an average score for both 2001 and 2011, we can see how the demographic profile of a local market has changed during the ten year period in the map. The darker red area on Map 1, the greater the increase in more affluent residents while the darker blue areas have increased their share of less affluent residents. It is important to note that in many areas, the number of people in all categories has increased but the colour shows which socio-economic groups have increased the most. REGENERATION EFFECT Many of the areas that saw the steepest rise in concentration of more affluent residents (darkest red) are those that have also seen a large amount of regeneration. Many areas of substantial new build activity have been located in places with very few existing residents and so the positive regenerating effects of the new build development have been considerable. These include areas such as Stratford, Canary Wharf, Bermondsey and the City Fringe.The most expensive and hence wealthiest housing markets have tended to see the greatest house price growth. However the pressures on London’s housing stock lead many to look for more affordable areas to live and so there are also signs of a shift towards affluence in existing markets such as Stoke Newington, Hackney and many areas of south London. As result, the borough of Hackney, which has been at the forefront of this trend, has seen price growth in excess of similarly priced markets during the 2001 to 2011 period. OUTER SUBURBS Conversely, the areas that have seen an increase in less-affluent residents tend to be found in the suburbs. Ranging from Hounslow, Ealing, Wembley and Harrow in the west to parts of Wood Green, Walthamstow and Ilford to the north and east. They also include areas of blue around Kingston upon Thames and Croydon to the south. For many less affluent and typically younger people moving to London the cheapest way to live is in a shared house in the private rented sector. The housing stock in more central locations tends to be smaller and more expensive and so doesn’t offer the same economies of scales as a suburban house. It is also in these blue areas that we can find over-crowding (or hutching up) in the private rented sector. The map above shows the location of overcrowding in the private rented sector and the largest concentrations are found in a suburban ring around central London. Underlying the trend in gentrification has been a rapid rise in London’s population and a severe undersupply of new housing. London’s population actually shrank during the post-war period and only began to recover again in the 1990’s. There are now more than eight million people living in London. Projections show that by 2021, the population is set to rise by another million, the fastest rate of growth ever. With a strong economy attracting people from across the country and around the world, London is an extreme example of the issues facing our use of housing stock. Our recent report 'London Demand' identified a substantial undersupply of new homes, particularly in lower value markets. We expect to see the delivery of new homes average 28,500 a year over the next five years and we estimate a need for at least 50,000 a year to meet economic growth forecasts. This leaves a shortfall of 21,500 units a year and the majority, 70%, of this at the lower and more affordable end of the market. This will prove a challenge in the current development environment and will require new models to begin to solve these problems.
Study hand-selected by Noah Winkler, source: https://www.savills.com/research_articles/255800/171784-0