Londoners’ finances

The London Intelligence – Snapshot of Londoners – Spring 2022

Londoners’ finances

The rising cost of living means Londoners are struggling to afford basic essentials 

London has the highest poverty rate of any region in the UK once housing costs are taken into account 1, and higher inflation over the past months has taken a significant toll on affordability in London. The perceived availability of house prices, rent, food, and transport was at its lowest since we began polling Londoners in 2020. 

The most striking change was in the perceived affordability of food prices: 23 per cent of Londoners found food either unaffordable or very unaffordable for them personally, up from 12 per cent in June 2021, highlighting the gravity of the current cost of living crisis. The proportion who found food unaffordable was even higher for parents with children under 18 (28 per cent, compared to 19 per cent for people without children under 18), renters (28 per cent, compared to 17 per cent for homeowners), and women (25 per cent compared to 21 per cent for men), as these groups make up most of the households who are struggling on very low incomes. Labour and Green Party voters were more likely to find food unaffordable (26 per cent and 28 per cent respectively) compared to Conservative voters (15 per cent). 

A majority of Londoners thought house prices in London were unaffordable for them personally, while only 20 per cent of respondents say house prices are affordable or very affordable, a drop from 28 per cent in June 2021. While some have suggested that London house prices would fall during the pandemic, this has not happened. Prices are continuing to rise, and wider cost of living pressures have made the situation worse for many people.

Only 23 per cent Londoners said that rent in London was affordable for them personally, down from 29 per cent in June 2021, while 47 per cent said rent was unaffordable for them personally, up from 41 per cent in June 2021. This highlights the cost of living crunch that many Londoners are experiencing: cost for many essentials have been increasing – from food to transport fares and energy pricesbut average private rents in London have not. 2 Again, predictions that private rents would fall as remote working rises have so far not materialised, apart from prime dwellings in the inner city, but these were out of reach for many Londoners in the first place. 

London has a world class transport system, but 25 per cent Londoners said it is unaffordable for them personally, up from 18 per cent in June 2021. This is the highest proportion since the start of the survey in June 2020. This is a troubling finding as people factor in transport costs when they look for jobsso many Londoners are limited in the job opportunities they can access because of the costs of travel. It is also a blow to central London and other major town centres, as more people are likely to curb travel across the city to save on costs. 

The question was asked as fares across the Transport for London network increase by an average of 4.8 per cent on 1st March, and fuel prices were 22 per cent higher in February 2022 than a year previously. 3  

Almost one in ten Londoners (9 per cent) got at least some of their  groceries from a food bank in the past month, showing the large scale of hardship in the capital. The proportion of people unable to pay for food was higher among young adults, families with children, and Black, Asian and Minority Ethnic Londoners. Recent research has found that lower-income households will face a higher inflation rate than higher earners because essentials such as food and energy represent a greater proportion of their budget. 

35 per cent of Londoners said they were struggling to make ends meet – this is an increase from 29 per cent in June 2021 and a higher proportion than in all previous waves of the survey. This increase meant there were more Londoners struggling to make ends meet than people describing themselves as comfortably well off. There was a corresponding fall in the proportion who say they have enough money to get by – this was lower than at any point in our survey.  

Tenants are more likely to say that they are struggling to make ends meet than homeowners. Over half of those out of work and looking for work say they are struggling to make ends meet (55 per cent agree or strongly agree), compared to 33 per cent for those employed. Over half of Londoners with a disability agree or strongly agree that they struggle to make ends meet (54 per cent). 

Londoners’ personal finances have taken a toll since our last poll – 68 per cent of Londoners would be able to meet an unexpected expense of £500, down from 73 per cent  of in June 2021. Only 43 per cent would be able to pay from their own money. 

There were large differences across group in their ability to meet an unexpected expense. While only almost one in five (18 per cent) men were unable to meet an unexpected expense of £500, one in three (32 per cent) women were not able to pay. To put it into perspective, this difference is equivalent to that of the ABC1 (16 per cent) and the C2DE (31 per cent) socioeconomic groups. The largest difference is found, however, between the ability to pay of tenants and homeowners, reporting 37 per cent and 13 per cent respectively. 

People aged 34-54 were the least likely (64 per cent) to be able to afford an unexpected £500 expense, and this is driven mainly by a significant drop in people’s ability to borrow from family, friends and companies. On the other hand, 75 per cent of those aged 55+ were likely to be able to afford the expense. 

White Londoners were significantly more likely (48 per cent) to be able to meet the expense from their own money than Black, Asian and Minority Ethnic Londoners (37 per cent), but also less likely to be able to meet the cost through borrowing. Similarly, Londoners with children under 18 were less able to meet an unexpected £500 expense from their own money (36 per cent) but is compensated by better access to borrowing. 

  • 1 Trust for London. London Property Profile.
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