London's real capital

“If you have capital in this country,” Alex Hilton, director of the advocacy organization Generation Rent, told me, “you can get other people’s money.” Without capital, those of us who do not own property resign ourselves to running in an exploitative rat race. The race is rigged, of course, because some can never win. London was always a city where extreme poverty lived cheek by jowl with extreme wealth, but the contrasts are starker than ever where a majority is scrambling to make ends meet while a wealthy minority treats the city purely as an asset base for investment.

The average home in London costs nearly 20 times the average salary in Britain. The imperative to get a return on that capital investment is passed on to the renter. According to the housing charity Shelter, Londoners spend nearly three-fifths of their monthly income on rent.

In Stratford, the East London site of the 2012 Olympics, a new postcode has appeared. E20 used to be the made-up postcode of the fictional London borough Walford, from the BBC’s hugely popular soap opera “EastEnders.” Now, it’s the postcode of the East Village, which was briefly home to the athletes competing in the Games. The village’s cluster of affordable homes was available to rent at 80 percent of market rates, which meant that they cost between £1,244 and £1,688 a month (about $2,000 to $2,700). The average annual salary is £26,500 ($42,600). Preparation for the Olympics saw lavish construction of new motorways and roads, complete with segregated cycle lanes and rows of new housing. The imposing £1.4 billion ($2.25 billion) Westfield shopping center was built in 2011.

Tower Hamlets has experienced waves of migration, and is one of the most multicultural areas in London. It’s also still one of the most deprived, with half of the borough’s children living in poverty. Social mobility has become social stagnation. With housing at a premium, London rents are eye-wateringly expensive in comparison with the rest of the country. Tenants turn to the state for help, but these are not welfare cases: Nationally, over 90 percent of all new claims for housing benefits are from households where at least one adult is working.

MPs of course, are lax on the issue. That may be because a third of them are buy-to-let landlords. It has long been the consensus that young people today will never enjoy the easy circumstances that the generation before us could take for granted. But this isn’t just a generational issue; it is a class issue. Day-to-day living is precarious for those not born into wealth. Those without London’s capital find themselves at the mercy of it. London’s housing is no longer for those who need it but for those primarily concerned with accumulating capital.

Adapted from here