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Story highlights

Spiraling property prices in London and uncontrolled rent push property ownership out of reach of many

One pollster identified London housing as "a key electoral battleground" in UK election on May 7

Poor people are now being pushed out of the city, say experts

London CNN —  

The leafy avenues of Islington, a chic neighborhood in north London, are lined with handsome Georgian buildings and all the luxuries money can buy.

If you need a $300 pair of high heels, 12 hand-made macaroons or a toenail trim for your French Bulldog – no problem – it’s all right there on your doorstep.

And no need to sweat it out on the subway to get to work. The area is what Charles Dickens called a “walking suburb”: near enough to financial district The City and central London to get there by foot.

There’s no denying that Islington is a lovely place to live – if you can afford it. The average price for a two-bedroom flat here is a little less than $1 million (£660,000), according to estate agents Foxtons, although prices can be as high as $2 million (£1.4m).

For a long-time Islington was the home of London’s left-wing intelligentsia – journalists, writers, politicians and thinkers. Now it’s more likely to be within the reach of a banker – or a foreign investor. And it’s a story playing out across the UK’s capital city.

Spiraling property prices and uncontrolled rent have pushed property ownership out of the reach of many, leaving some Londoners feeling resentful. The situation is so severe that one pollster identified London housing as “a key electoral battleground” in the UK election on May 7.

According to online real estate portal, Rightmove.co.uk, in the last 10 years average asking prices in Greater London doubled from $415,000 (£284,000) to $849,000 (£580,000).

“The city … has become remarkably divided between the haves and the have-nots – it’s becoming uncomfortable,” Ian Jack, a columnist for The Guardian newspaper who has lived in London for 45 years told CNN.

Jack lives in Highbury, close to Islington, and uncomfortably acknowledges that he is one of the winners in London’s property boom. He bought a “standard” red-brick Victorian house in the area in 1987. Now, some 25 years later, properties on the road are selling for 10 times what he paid.

The world’s capital city

In some ways, London is a victim of its own success.

It is the world’s unofficial capital of globalization – famed for a culture of openness that has transformed it during the past half-century from the down-at-heel capital of a former post-colonial power into a free-market economic and cultural powerhouse envied the world over.

The only other city globally that can compete with London is New York, says Tony Travers, director of LSE London, a research center at The London School of Economics and Political Science.

“London and New York have a role in terms of international finance, in terms of international culture, the global nature of their population, and, indeed the reputation they have beyond own bounds,” he says.

London’s draw and the relative youth of those who live there is causing the city, which currently has 8.5 million inhabitants, to grow at a rate of 100,000 per year, Travers adds.

But despite London’s mammoth economy, inequality is rising.

New research published by the Trust for London, a charity that tackles inequality in the city, shows that the number of households classified as either poor or wealthy has grown in recent decades – while those in between are in decline.

Janiz Murray is a council tenant who has lived on the Carpenters Estate in Stratford, Newham, one of the most deprived boroughs in London for over 30 years.

A mother of three who works as a nutritionist, she pays £580 ($870) a month for a three-bedroom house, about a third of average market value rents in the area.

Newham Council has been looking at demolishing and redeveloping the estate since the beginning of the century, saying refurbishment is too expensive.

But Murray remembers it was when London scooped the Olympic bid in 2007 that residents really felt the pressure.

“When we won the bid, there was a big push to move people off the estate. With the prestige of the Olympic (site) being right behind our estate the land would be worth a lot more,” she says.

Tenants at the estate have successfully fought eviction twice since then, although some have voluntarily moved out and been rehoused by the council within the borough.

But for Murray and others on the estate it is home – and demolishing it would rip apart their community.

“I’ve lived in other places and I’ve not felt as much a part of the community as I do here. Everyone knows each other, which you can only do over years.

“It’s hard to explain all of the feelings but I just think that these people, none of whom really live in Newham, are making decisions and not taking any of our concerns or feelings into consideration.”

Social cleansing

Poor people are now being pushed out of the city, says Loretta Lees, Professor of Human Geography at the University of Leicester and an expert on London and gentrification.

“London is being socially cleansed,” she says.

Lees estimates that more than 50 London council estates – social housing built and maintained by local government – are being demolished and redeveloped. Often these areas offer the only affordable accommodation in wealthy areas.

Her research has found that while local governments say that former tenants will come back and join the new improved communities – usually two-thirds middle-class tenants, one-third ex-council tenants – the reality is that very few do return.

“We are talking about 10,000 people being cleared out of London (since 2000),” Lees says.

Many are decanted to towns along the south coast of England or hundreds of miles away in the north of the country into so-called “benefit tenant dumps,” she adds.

Poorer tenants who do end up in “mixed” housing can be segregated from wealthy tenants and given separate entrances.

All of this is hugely problematic, says Lees, because in a city economy you need a mix of people, those who can cook, clean and drive cabs as well as those who do deals and argue in court. She fears the city is returning to a Victorian model where there’s no social housing.

In response to the pressures, developers have, in the past year, been facing increasing community resistance against planned redevelopments: The Sutton Estate in upscale Chelsea where residents are putting together an alternative development plan; Sweets Way in Barnet<