Over the past couple of years there have been lots of stories of families – and 30-somethings more generally – leaving London and moving to the other big cities in the UK because of the high cost of living London. Our new research sheds light on the pressures felt by families living in the capital.
I live in Nottingham and have witnessed this migration from London first hand. A few years ago, just before my daughter started school, I went along to a ‘new parents’ meeting to meet the teachers and other parents. Over the course of an hour or so wandering around the school, chatting to other parents, I was struck by just how many of them had left the capital to come and settle in Nottingham. Many had left well paid jobs behind, all had left good friends, smaller properties and the ‘buzz’ of the UK capital. There were, of course, many different reasons behind the exodus. But one thing all had in common was a firm belief that bringing up a family in London posed a significant financial challenge.
Whatever the reasons are for families leaving London, it is clear that higher housing, childcare and transport costs exert substantial pressures on family finances. Our Minimum Income Standard [MIS] London research, published today, reports that 1 in 3 Londoners cannot afford a minimum acceptable standard of living as defined by members of the public. This figure rises to more than four in ten (43%) when looking at people living in families with children. These calculations are based on detailed deliberations among groups of Londoners about what different households in the capital need to in order to have a decent standard of living. This includes basic food, shelter and clothing, and opportunities to participate in social life; for instance the transport needed in order to access employment opportunities and the activities needed for children’s social development.
Like everybody in the capital, parents who live in London are affected by high housing costs. Families in London need to pay more than a third as much again for social housing than families elsewhere in the UK. For instance, a couple with two children living in a three-bedroom flat pay an extra £53 per week in the MIS for London. The premium for living in London is even greater than this if families are living in the private rented sector. Parents in London also face exceptionally high childcare costs. In Inner London, childcare costs more than half as much again on top of the costs faced by parents elsewhere in the country. Full-time care for a toddler costs around an extra £90 per week, for example.
Families in London are not only affected by high prices, but by different infrastructure and different ways of living. For instance, although parents in London said that families can get around on public transport and don’t need a car like families elsewhere in the UK, public transport in the London can be more expensive than the cost of owning and running a car. Two Zones 1-6 monthly Oyster cards, for example, costs parents in Outer London £42 per week more than the cost of running a car for a family of four outside the capital.
These high costs combine to make living in London unaffordable for striking numbers of households with children. Our research reveals that at least 330,000 London families have an income less than that needed to have a minimum decent standard of living in the capital.
This latest addition to the Minimum Income Standards programme of work reveals not only that a shocking number of families are unable to afford a decent standard of living in London, but that raising incomes alone will not be sufficient in enabling parents to make ends meet. For a lone parent with a one-year-old requiring full-time childcare, even an average income is not adequate to reach the standard of living below which Londoners have said no one should fall.
So what can be done? We need a two-pronged approach that encourages employers to play their part in addressing low wages, but also tackles the disproportionately high costs faced by parents in the capital. The new Government’s promise of 30 hours free childcare for three- and four-year-olds could make a big difference to the income required by many households in London. However, the high costs of housing and transport must also be addressed if we are to make our capital city affordable to families on low incomes.
The big question here is ‘what kind of city do we want London to be?’ Do we want a city that is only for the rich? Or do we want an inclusive city, where all are able to live, work, flourish and enjoy all that makes London one of the most visited cities in the world?