Hackney is no longer the sixth most deprived borough in the country, climbing to 49th in just five years, according to government figures.
Tower Hamlets has also moved from seventh most deprived borough in 2010 to 24th, according to the Indices of Deprivation 2015 report, which divides the country into 326 areas.
But the latest findings, published by the Department for Communities and Local Government (DCLG), show that Tower Hamlets is still one of the poorest areas.
Officials measured the boroughs income deprivation based on the proportion of population on a low income either in or out of work and found that 49 per cent of older people aged 60 or over and 39 per cent of children in Tower Hamlets are living in poverty due to low income.
The significant improvement in Hackney’s deprivation ranking can in part be contributed to the well-documented gentrification of the borough.
Tom MacInnes, Research Director at New Policy Institute, a think-tank focusing on poverty and social welfare reform, said that the areas decreased deprivation was a mix of an improving economy and a new population moving in.
MacInnes, who lives in Hackney, said: “Obviously you can see it. The population has grown and there are more people moving in who are not poor. They might not be rich either. They are young people and young professionals… it changes the mix of the population.
According to a report published by Hackney Council in 2014, house prices within the area are increasing at a faster rate than the London average, with the median monthly private rent of a two bedroom home in Hackney being 1560, compared to 1380 in London.
Aside from a new population, MacInnes explains that a growing London economy will also effect Hackney and Tower Hamlets’ rank.
“A lot of the data is driven by unemployment and people claiming benefits, because that is the data they (DCLG) can really get hold of. Over the last five years the number of people claiming benefits has come down a lot, and it has come down more (in London) than the rest of the country.”
“London has added more jobs, its economy has grown quicker. The knock on effect of that is lower unemployment and fewer people claiming benefits.”
“For instance, across London there are more lone parents in work now than there were a few years ago” he continued.
“And that isn’t because poor lone parents moved out and rich lone parents moved in. I think it is because those lone parents are now in work when they weren’t a few years ago.”
Officials ranked local authorities on the proportion of their neighbourhoods that were in the 10 per cent most deprived nationally.
However, MacInnes warned, the data is relative. “Hackney and Tower Hamlets moving out of the bottom 20 might be as much to do with other places getting worse relative to them getting better. Being 24th poorest borough in the country still isn’t that amazing. It still means there is a lot of deprivation there”,he said of Tower Hamlets.
John Biggs, Mayor of Tower Hamlets, has raised concern about rising prices within the borough, arguing that that a reduction in poverty may be due to low income families no longer being able to afford to live in our borough.
“I am concerned that the collective impacts of welfare reform, an overheated rental sector and a trend of rising house prices in the capital will undermine our local efforts to support the most vulnerable”
“I strongly believe that people should not be forced to move out of the borough, or the capital, because of their net household income,” he continued.
“Julia Unwin, Chief Executive of Joseph Rowntree Foundation, a social policy charity, said: “The deprivation that persists across parts of London, in particular in places like Tower Hamlets right on the door step of so much wealth generation – draws the issue into sharp focus.
“City Leaders, local councils, employers and voluntary groups need to be more ambitious in bringing growth and poverty plans together to generate better jobs and build more inclusive, sustainable local economies.”