If for London the 1980s was the decade of yuppies, now the capital finds itself home to the "endies" – Employed but with No Disposable Income or Savings.

Feeling unloved, overworked and ignored, endies are becoming disillusioned with their lot, according to a report from the Centre for London that suggests there are now about a million modest earners in the capital.

Hollow Promise: How London is Failing its Modest Earners and What Can Be Done About it – which is based on quantitative research and in-depth interviews with families on modest incomes – paints what it claims is an alarming picture of the pressure on "squeezed-middle" households, those on low to modest incomes who are not entitled to most benefits.

It finds that most "endies" are struggling to make ends meet and few are managing to save. The authors note: "While 'endies' don't complain, they are increasingly disenchanted with the political system. Unless London does better by them, the city's politics could easily turn sour."

The report claims that low- to middle-income workers have been hit hard in the capital because rents are around 50% higher than in the rest of the UK. For households with incomes between £20,800 and £28,500 a year, rental costs have risen 4% in real terms over the last decade. Rent now accounts for about 41% of their incomes.

It warns that "endies" who do not own a home have almost no chance of buying one. "There are now only three boroughs – Tower Hamlets, Newham and Barking and Dagenham – where home ownership is potentially affordable for two people earning that borough's median wage," the report says.

Other costs in the capital have soared. Between 2008 and 2014 trips using pay-as-you-go Oyster cards rose in price by 61% for bus journeys and 47% for the underground. A zone four resident on an annual salary of £22,000 spends the first 55 minutes of their working day just paying for their commute to and from work.

Between 2001 and 2011, the average London fuel bill rose by more than 50% above inflation. Nursery care for a child under the age of two is 25% more expensive in London than elsewhere in Britain. A London couple with one child need a second earner with wages of at least £17,000 to make full-time childcare cost-neutral.

"As this report shows, London is failing its modest earners," said Ben Rogers, director of the Centre for London. "They take pride in working hard, and make an essential contribution, but as their wages have deflated, the cost of living in the city has shot up. Yet there are a range of innovations that could help make life easier for London's hard-pressed working families – above all through developing a new generation of decent affordable homes in good quality neighbourhoods."

David Lammy, MP for Tottenham, said the report was the first to show how lower middle earners in London had been particularly hard hit. "We need a new agenda for London's middle earners – one which will help boost their earning power while reducing housing, transport and other costs."

Charles Leadbeater, the report's author, said few "endies" could leave the capital. "The vicious combination of very flexible and competitive labour markets and a very distorted housing market means they're not just under pressure but trapped. If you look back at the 1980s people in these positions would probably be able to afford houses in a way they can't now.People's costs have gone up much more sharply. This is a problem for London. London needs these people. But if, say, you are a teaching assistant working in Walthamstow you are working really hard just to stand still."He suggested the capital's complexion would suffer if things continued. "Zone 1 inside the Circle Line will become like Dubai. It will be inhabited only by cosmopolitan people who come to London to spend money."

Leadbeater, a former adviser to Tony Blair, warned that there would be "a political price" to pay unless the needs of endies were addressed and a new generation of well-designed affordable homes in good quality neighbourhoods were created.

"Endies think Aldi and Lidl address them, but no one else. They feel they are overlooked and betrayed. There is an underbelly of quiet resentment building up."