A report into the relationship between housing and poverty has provided a stark warning to east London boroughs, with Hackney rated as having the highest level of housing deprivation in the UK.
The Joseph Rowntree Foundation, an organisation that lobbies for a more equal society, has called for organisations to “work together on an action plan to solve the housing crisis and keep poverty in check” in Monday’s report.
Studying the circumstances of 5000 people over an 18-year period the report, titled “What will the housing market look like in 2040?” named 10 London authorities as having “the highest concentrations of housing-related deprivation”.
On this list, Hackney was ranked first with Tower Hamlets in seventh and Lewisham twelfth owing mostly to what a spokesperson has called a “continuing decline in home ownership and social renting, together with a lack of new homes, [that] will result in more people living in private rented homes”.
The JRF is “an endowed foundation funding a UK-wide research and development programme”.
Julia Unwin, chief executive of the JRF, said: “After decades of failing to build enough, those in power have a responsibility to act now to build more genuinely affordable homes. Without that we are storing up trouble for the future – a price that will be paid by children starting school life this year. These high costs are bad for families, the economy and government.”
The 80-page report rates deprivation and poverty in “Lower Layer Super Output Areas”: a system in which units of housing are grouped together in small enough amounts to provide an accurate measurement, but in large enough groups to protect identities.
It is by these standards that the authorities of Hackney and Tower Hamlets have been ranked in England’s top 10 most deprived areas.
Private rents are forecast to rise by around 90 per cent in real terms between 2008 and 2040. By contrast, income will be rising at half this projected rate, pushing 50 per cent of private renters into poverty by 2040.
Alex Hilton, chief executive of rental campaign group Generation Rent, described the current rental system in the UK as a “big pyramid scheme”, arguing that if current trends in the market continue, it could lead to rent strikes similar to those seen in Glasgow in 1915.
The average London rent has grown by 9.6 per cent in the last 12 months to £1,466pcm. At the rates forecast by the JRF rents would rise to £2,785 by 2040.
In February 2012, Tower Hamlets published a report stating that 44 per cent of households were suffering from income poverty: a rate defined as being 60 per cent below the national median rate of £21,120 per annum.
However, the council is suffering from the highest rate of child poverty in Great Britain at 48.6 per cent.
Tower Hamlets has an average weekly income of £889 representing the huge disparity between those who live in the borough and those who work there.
One of the authors of the report Mark Stephens referred to the findings as a “wake-up call” to the government’s affordable rent scheme.