What does the data say about London’s prospects for prosperity?

Look! Some data! Image: Getty.

Can you assess the prosperity and performance of a global city when there is so much going on at once? How do you reflect this complexity and balance a range of indicators, capturing aspects of the city that might be missed in more traditional, one-dimensional analyses?

We are trying to do this at Centre for London with our new quarterly publication, The London Intelligence, which provides a regular picture of London’s performance across a range of indicators.

We are still reviewing the lessons learned from our first edition, which came out in July. We found no shortage of data, but bringing it together with the careful analysis that creates intelligence was a more complex matter – as shown in the examples below.

Immigration to London: National Insurance Number Registrations

One frequent measure of immigration is the number of overseas nationals registering for National Insurance numbers (NINos), which they need to work or claim benefits in the UK. As a full administrative data set, these tell us information about people coming to London, including their nationality and place of application.

There is some quarterly variation, but data shows a 15 per cent reduction in the number of registrations from January to March this year, compared to 2016. Most of this fall came from EU citizens, perhaps signalling a worrying fallout from Brexit.

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Some nuances in interpretation exist, however. The quarter does not necessarily reflect when an individual arrives in the UK – the figures above probably demonstrate a lag effect.

While the numbers reflect international migration, they do not paint a complete picture: not accounting for people coming for other purposes (such as students), and not saying anything about length of stay, or if they have left. For example, we showed a drop-off in Europeans arriving; Europeans may be leaving in even greater numbers, but these data would not show that.

So while this decline is worrying, it is not necessarily significant in isolation – using future releases combined with other datasets, it will give more insight.

Young people not in education, employment or training (NEETs)

There are many economic indicators available – the publication includes eight – but here we discuss NEET rates, because it provides an indication of inclusiveness of London’s labour market.

According to the data, outcomes of young people in London have been improving recently, reaching a record low of 8.6 per cent. The observed seasonality results from school/university leavers, giving spikes in each third quarter.

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However, data on young people at the margin of London’s labour market is relatively poor. NEET estimates come mainly from surveys compiled by the Department for Education – meaning there are margins of error to each estimate. Therefore, while London’s rate may appear lower than the England rate in the most recent quarter, we cannot say for certain this is the case.

Further, evidence suggests the survey misses up to a quarter of youngsters in the capital, whose status is declared ‘unknown’, and so London’s young people may not be doing as well as suggested.

House Prices

National house price changes are often quoted in the media, but this belies layers of complexity. In the publication, we use mean house prices using Land Registry data on housing transactions, which acts as a headline indicator for London’s housing market (and a wider acid-test of the economy).

The data can be tracked over time and space in London. Borough-level analysis reveals distinct patterns over the year to April: outer boroughs are largely experiencing strong growth, while inner east boroughs in particular are cooling off.

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There are some limitations to be aware of. At borough level, prices are not mix or seasonally adjusted, and with small volumes of transactions, comparisons can be difficult – average (mean rather than median) prices tend to jump around a little each month dependent on the properties sold. Further, not all transactions are registered immediately, so readjustments (mostly small) happen in the medium term.

The borough data is useful for a spatial interpretation of trends, but does not give significant insight into the performance of different housing sub-markets, which often have divergent trends. Even within boroughs, different areas may be seeing dramatic differences in property market performance.

Looking at datasets in conjunction can be a powerful tool, especially when limitations are acknowledged, and numbers are explained and given meaning. It can provide a holistic and accessible, rather than parochial and specialist, view into our rapidly changing city, as the uncertainties of Brexit start to bite.

Tom Colthorpe is a researcher at Centre for London. You can learn more about the London Intelligence, and get your copy, here.

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A growing number of voters will never own their own home. Why is the government ignoring them?

A lettings agent window. Image: Getty.

The dream of a property-owning democracy continues to define British housing policy. From Right-to-Buy to Help-to-Buy, policies are framed around the model of the ‘first-time buyer’ and her quest for property acquisition. The goal of Philip Hammond’s upcoming budget – hailed as a major “intervention” in the “broken” housing market – is to ensure that “the next generation will have the same opportunities as their parents to own a home.”

These policies are designed for an alternative reality. Over the last two decades, the dream of the property-owning democracy has come completely undone. While government schemes used to churn out more home owners, today it moves in reverse.

Generation Rent’s new report, “Life in the Rental Sector”, suggests that more Britons are living longer in the private rental sector. We predict the number of ‘silver renters’ – pensioners in the private rental sector – will rise to one million by 2035, a three-fold increase from today.

These renters have drifted way beyond the dream of home ownership: only 11 per cent of renters over 65 expect to own a home. Our survey results show that these renters are twice as likely than renters in their 20s to prefer affordable rental tenure over homeownership.

Lowering stamp duty or providing mortgage relief completely miss the point. These are renters – life-long renters – and they want rental relief: guaranteed tenancies, protection from eviction, rent inflation regulation.

The assumption of a British ‘obsession’ with homeownership – which has informed so much housing policy over the years – stands on flimsy ground. Most of the time, it is based on a single survey question: Would you like to rent a home or own a home? It’s a preposterous question, of course, because, well, who wouldn’t like to own a home at a time when the chief economist of the Bank of England has made the case for homes as a ‘better bet’ for retirement than pensions?

Here we arrive at the real toxicity of the property-owning dream. It promotes a vicious cycle: support for first-time buyers increases demand for home ownership, fresh demand raises house prices, house price inflation turns housing into a profitable investment, and investment incentives stoke preferences for home ownership all over again.

The cycle is now, finally, breaking. Not without pain, Britons are waking up to the madness of a housing policy organised around home ownership. And they are demanding reforms that respect renting as a life-time tenure.

At the 1946 Conservative Party conference, Anthony Eden extolled the virtues of a property-owning democracy as a defence against socialist appeal. “The ownership of property is not a crime or a sin,” he said, “but a reward, a right and responsibility that must be shared as equitable as possible among all our citizens.”

The Tories are now sleeping in the bed they have made. Left out to dry, renters are beginning to turn against the Conservative vision. The election numbers tell the story of this left-ward drift of the rental sector: 29 per cent of private renters voted Labour in 2010, 39 in 2015, and 54 in June.

Philip Hammond’s budget – which, despite its radicalism, continues to ignore the welfare of this rental population – is unlikely to reverse this trend. Generation Rent is no longer simply a class in itself — it is becoming a class for itself, as well.

We appear, then, on the verge of a paradigm shift in housing policy. As the demographics of the housing market change, so must its politics. Wednesday’s budget signals that even the Conservatives – the “party of homeownership” – recognise the need for change. But it only goes halfway.

The gains for any political party willing to truly seize the day – to ditch the property-owning dream once and for all, to champion a property-renting one instead – are there for the taking. 

David Adler is a research association at the campaign group Generation Rent.

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