A Tale of Two Londons

For years, London has been a playground for international investors while 2.5 million Londoners – 28% of the population – lived in poverty. As Covid-19 slows the influx of capital, it's time to imagine a more equal city.

The Office for National Statistics estimates that in the summer of 2020, 893,000 non-UK residents left the country. Reports from the government-funded Economic Statistics Centre of Excellence suggest the outflow was even higher, at 1.3 million, with more than half departing from London alone. That’s equivalent to roughly one in twelve leaving the city.

It’s thought that the exodus is composed mainly of the highly paid and the economically mobile. As a result, the traditionally buoyant London rental market has taken a hit, with fewer tenants leading to a fall in rent. In the 12 months to October, average rents in London fell 6.9%, according to property portal Zoopla. Normally, that would mean more choice for housing, and more scope for price negotiations – but there’s little sign cheaper rentals are attracting people to the capital.

The pandemic has slowed the usual influx of new residents, discouraged international buyers, and given wealthy locals new reasons to depart, as it becomes clear that without profit to be made, the capital’s high status is slipping. For most of its residents, though, this is nothing new: life in London has long been a disenchanting experience.

Over the years, London has become a playground for the super-rich, with those on the lower rungs of the class ladder made unwelcome. As a concentrated model of the wider deregulated (and often corrupt) economic and political structure of the UK, which prioritises wealth creation above all else, the capital is home to around 100 billionaires. So when it comes to London’s housing development, the focus is on the accommodation of pounds sterling, not people.

More than half of the prime accommodation—of which there is plenty—goes to offshore anonymous buyers or wealthy international investors, leaving an estimated 125,000 homes in the city empty. They’re used as unregulated Airbnb lets or as second homes. Tens of thousands more are under construction, all of which will deliver for investors without housing Londoners.

A lot of these deluxe high-rise towers come on the back of council house demolition. The oft-made promise of affordable social housing rarely materialises. One notable example is Elephant and Castle’s Heygate estate. The estate was torn down in 2014 to be replaced by a shiny new development that Londoners were promised would provide affordable, accessible homes, and establish a ‘community feel’.

The opposite happened. The properties were advertised in Singapore two years before they were on the market in London. Transparency International, a not-for-profit organisation which exposes global corruption, stated in a report in 2017 that all of the first 51 properties for sale went to offshore foreign investors, while most of the original residents were forcibly displaced. Since 1997, the same fate has befallen 135,000 London council tenants.

At the 2017 Labour conference, Jeremy Corbyn criticised the ‘forced gentrification and social cleansing’ of council estates, and in the years since the problem has only grown worse. In 2020, one home was sold for £200 million—a record fee in London—while the city’s councils warned of homelessness reaching its ‘worst-ever levels’.

Since the start of the Covid outbreak, the life-and-death risks posed by inequality, poverty and inadequate housing standards have been made clear. Those facing greater socioeconomic deprivation in England and Wales are twice as likely to die from the virus. In London, the areas that turned into hotspots for Covid-19 deaths were those facing overcrowding and high exposure due to low-paid frontline work.

London has the highest poverty rates in the country. In 2020, 28% of people in the city—2.5 million—were in poverty, compared to 22% in the rest of the UK. That the virus disproportionately affects the disadvantaged meant the capital made for a happy hunting ground.

It didn’t help that the services on which deprived areas rely so heavily were decimated after years of public cuts. A study conducted by the Institute for Public Policy Research concluded 130,000 deaths in the last decade could have been prevented if improvements in public health policy had not stalled as a direct result of austerity. In the hyper-competitive world of neoliberal capitalism, where the social Darwinist doctrine reigns supreme, survival is deliberately made a struggle for the working class. It should not have taken a pandemic to make this clear.

Measures designed to tackle the issues facing London’s poorest often burden them instead. Air pollution consumes up to 36,000 lives every year across the UK, and the capital’s most vulnerable communities are among the most severely affected. The ultra-low emission zone (ULEZ) launched in London is supposed to combat that, by making older, more polluting vehicles subject to a £12.50 daily charge. But it’s not wealthy Londoners and their supercars who will suffer from the fee. Instead, it’s those in jobs that pay less than the London living wage, or those who are unable to afford to upgrade their vehicle.

It took a major halt to international travel and the shutdown of the country’s usually relentless pursuit of capital to make it obvious – but the inequality in London has for years been a death sentence. In the aftermath of the pandemic, we cannot afford to return to a city split in two: rather, the disappearance of the billionaires might just be an opportunity to build something that works for the rest of us.