London boroughs dominate growth in household income over past decade

Publication featured in: The Telegraph, The Evening Standard, Time Out

Boroughs of Hackney and Newham rank top in GDHI growth

Between 2011 and 2021, the London boroughs of Hackney and Newham saw Gross Domestic Household Income (GDHI) growth of 80.1%, ranking them first out of 181 areas of the UK*. This increase is over twice the UK average (40%) for the same period.

GDHI specifically measures the amount of money that individuals in in the household have available for spending or saving after costs such as taxes and mortgage payments. Local increases in GDHI typically signal an improved standard of living and in many cases, the effects of ‘gentrification’.

The strong growth of Hackney and Newham, along with nearby Tower Hamlets (74%), is closely related to how these historically lower income areas have benefitted from the expansion of London’s technology and financial services sectors.

The boom in jobs created by these sectors has seen areas such as Shoreditch, Stratford and Bethnal Green increase in popularity due to their proximity and accessibility to the City. Job creation in Canary Wharf has also boosted the average household income in Tower Hamlets.

Martin Jones, audit partner from our London office, claims: “There’s been a huge increase in the levels of income in some up-and-coming areas in London. Areas that were seen as lower-income and unfashionable 10 to 20 years ago have become hotspots for growing wealth.”

“The growth in household incomes seen across Hackney, Newham, and Tower Hamlets is likely to be closely linked to the number of young professionals now living there. Many of these people will be working in the technology and finance sectors in the City and its fringes – areas like Old Street and Shoreditch that are only short commutes away.”

Aberdeen sees lowest national increase in GDHI

On the opposite end of the spectrum from London, Aberdeen has displayed the lowest increase in GDHI out of the 181 UK areas, showing just a 15.8% rise over the last decade.

Martin Jones adds: “Aberdeen’s slow growth in household income growth is entwined with the areas’ ties to the troubled UK oil and gas industry, which has been hit hard by declining North Sea oil & gas production.”

“Aberdeen was a real centre of wealth ten years ago and was often described as a boomtown. However, recent years have seen its local economy struggle. In some years it has even seen its population shrink.”