Publication

The Peabody Index

The key findings of the report are:

  • Real incomes for social housing tenants in London are lower than a year ago. The latest datapoints in the Peabody Index show that average real household disposable incomes among social housing tenants fell between mid-2017 and March 2018, as incomes struggled failed to keep up with increases in the cost of living over this time period.

 While real incomes ticked up in April, driven by more rapid employee earnings growth and declines in inflation, this has not been enough to offset the negative effects of the recent squeeze on real incomes. The average household disposable income for social housing tenants in London stood at £406 per week in April 2018, 1.1% lower than a year ago, and down from £413 in July 2017 (expressed in April 2018 prices – that is, adjusting for inflation). On an annualised basis, this amounts to a decline in real household disposable incomes of about £389 between July 2017 and April 2018.

  • Households in London have been much more affected than other regions by welfare cuts in recent years. Analysis of Department for Work and Pensions data on aggregate benefits expenditure by region shows that London households saw the least growth of any region between the 2013/14 and 2016/17 fiscal years. Furthermore, London households have been relatively more affected than other regions by both the underoccupancy penalty (‘bedroom tax’) and the benefits cap.
  • On the other hand, incomes of social housing tenants in the capital have been supported by rising levels of employment. Analysis of data in the ONS Labour Force Survey suggests that the proportion of economically active social housing tenants in paid employment in London increased from 78% to 88% between Q1 2008 and Q1 2018. The proportion that were unemployed fell from 20% to 11% over this time period, with the remaining balance of economically active tenants either undertaking unpaid family work (such as care) or in government employment or training schemes.
  • The income gap between social housing households and other households in London has widened since 2011. In August 2011, social housing households had an annual disposable income on average about £20,100 lower than other London households. In our latest data, covering April 2018, the income gap stood at about £27,110. In percentage terms the income gap widened from 51.8% to 56.2% over this time period. This reflects the fact that welfare restraint has curtailed income growth for a higher proportion of social housing tenants, leading to a widening income gap with the rest of the capital.
  • About two fifths (41%) of social housing tenants in London had no savings or investments in 2017. This is significantly higher than the 17% of all London households reported to have no savings or investments. Across the UK as a whole, 21% of households reported having no savings or investments (excluding housing and pensions) in 2017.
  • Housing and commuting costs in the private sector are highly unaffordable across much of the of the capital, highlighting the need for social housing. There is no borough in the capital where someone with a gross income of £19,500* can privately rent and commute into travelcard Zone 1 at combined costs of less than 80% of disposable income (based on lower quartile private rents for each borough). There are several London boroughs in the centre and West of the capital where combined rent and commuting costs exceed 100% of disposable income.

* 25th percentile employee earnings in London according to the 2017 ONS Annual Survey of Hours and Earnings

Share:
CONTACT DETAILS:
DOWNLOAD THE REPORT: PDF

Related items:

Page 1 of 1