First it was the bankers and now it’s the techies – young, affluent workers are moving into east London, driving up house prices and colonising new markets.
New research has shown areas across the capital where under-35s outnumber the over-50s by 2-1 – and the list is dominated by east London postcodes.
Places like Stratford, Whitechapel and Canning Town would have been no-buy zones for prosperous up-and-comers a decade ago but now feature in the top 20, compiled by estate agent Savills .
The flipside is that some traditional communities and the less prosperous young have been depleted in these areas, left with nowhere to go in the latest housing boom, which has seen the cost of an average London home rise above £500,000.
The pattern of outwardly expanding gentrification is not new. Emerging prime markets grow in locations that are “new, novel or next door” so places like Spitalfields and Dalston benefit while regeneration of the Docks and Greenwich is changing the face of riverside areas.
Analyst Sophie Chick of Savills said: “Buyer interest was fuelled by the wealth generated in the financial sector before the credit crunch but now we are increasingly seeing new tech businesses as wealth creators.
“Affluent younger buyers, often at the forefront of this enterprise have pioneered new housing markets,” she added.
A market survey in London compiled in 2014 to help Mayor Boris Johnson formulate housing strategy noted that the growth in young adults is a blend of international and domestic migration with 106,000 in their 20s coming to London from the rest of the UK.
The report said: “ Census data indicates that most international in-migrants are also relatively young, with 79% of recent arrivals aged between 16 and 34 in 2011, a similar proportion to domestic migrants.”
Sophie said: “London saw a 15% rise in the total number of business enterprises between 2009 and 2014 across all industries. However, while the Financial and Insurance
Industries sector shrank by just under 2%, the number of businesses in the Information & Communication and Professional, Scientific and Tech sectors rose by 32% and 28% respectively over the same period.
“These businesses cluster in less established commercial areas of London and new prime residential markets begin to emerge as a result.”
Free school meals
Evidence for this change is reflected in statistics that show the number of free school meals provided by schools has dropped considerably in Tower Hamlets and Newham. While unscientific, it does give an indication about the rapid speed of change with Newham seeing a fall of 31% between 2010 and 2015.
Labour’s mayoral candidate Sadiq Khan called this “social cleansing on a vast scale” caused by the combination of new prosperity, welfare reforms and higher rents. Some 50,000 families have been displaced from their home boroughs in the past three years.
Figures show that Tower Hamlets and Newham are third and fourth on the list of London “exporters”.
Mr Khan said: “This is not the kind of London I grew up in or want my daughters to live in. Families have been driven out of large parts of the city.”
Meanwhile, starter homes are unaffordable to the average household in 95% of London’s neighbourhoods, according to Green Party Assembly Member Darren Johnson.
He said: “The term ‘affordable housing’ is becoming increasingly meaningless.”
The areas where U35s now outnumber the over 50s by 2-to-1
- Bow East
- Stratford and New Town
- Spitalfields and Banglatown
- Canning Town South
- Blackwall and Cubitt Town
- Royal Docks
- Bethnal Green North
- Abbey Wood