London's Housing Crisis and the Inequality Chasm

London’s red-hot housing market of late is by now an international legend, drip-feeding the media with tragicomic stories of insane pricing on a weekly basis—from the $710 cupboard to the one-bedroom flat on sale for $37 million. Now a new report out this week details some of the harmful social effects that this boom in housing costs has wrought. Unsurprisingly, they are many.

The report, from the independent think tank Centre for London, shows that the rise in housing costs are far more than just a windfall for existing property owners. They are directly contributing to an inequality chasm, not just between London’s richest and poorest residents, but between the city and the rest of the country. The result is a situation where private renters are seeing their post-rent income plummeting, as housing costs gobble up ever more of their salaries. Meanwhile, wealth gains are only happening among the very rich.