Peabody Residents For
Affordable Housing
The legacy of ‘good George’:
an open letter to Steve Howlett
6 March 2012
Dear Mr Howlett,
Peabody celebrates its 150th anniversary on 27 March 2012. As newcomers to the ‘Peabody family’, exCrown Estate residents are also marking a significant event – the end of our first year as Peabody tenants. To commemorate this double birthday, we’re writing to offer our thoughts on the legacy of ‘good
George Peabody’ and how it can be safeguarded on our estates.
The purpose of the charity George
Peabody set up is ‘to relieve the
need of persons in Greater London
who are in conditions of need hardship or distress by the provision of
accommodation or otherwise’ (the
Peabody Donation Fund Act 1948).
He was particularly interested in
helping ‘the working poor’ – people
who worked hard for their communities but earned relatively little.
This noble history reassured tenants who fought hard to stop the
Crown Estate from selling their
homes to a private landlord or property developer. Even more reassuring was your personal assurance
that Peabody was ‘absolutely committed to keeping these properties
affordable’.
Yet, a year on, we have to ask – affordable for whom?
A glaring contradiction is opening
up between the direction of current
Peabody rent policy for these estates and your promise of affordability. Unless it is addressed, and
quickly, this contradiction will force
existing tenants out of their homes
and price key workers out of their
communities.
New ‘ceiling’ rents – the sky’s
the limit!
It’s becoming ever more obvious
that the policy of linking our rents
automatically to ‘market’ levels con-
“
A glaring contradiction
is opening up between
the direction of current
Peabody rent policy for
these estates and your
promise of affordability.
Unless it is addressed,
and quickly, this contradiction will force existing tenants out of their
homes and price key
workers out of their
communities.
Shelter estimates that in Westminster, the average private rent represents 82% of average take-home
pay in the borough. In Camden, the
figure is 77% of pay, in Hackney
67% and in Lewisham 59%. Shelter judges rent levels costing more
than 50% median take home pay to
be ‘extremely unaffordable’. Although there is no official
definition of ‘affordability’ in the
UK, Shelter suggests a reasonable
”
tradicts the goal of genuine affordability. The recent ‘market rent’ valuation of our homes by JLL, now
being used to set new ‘ceiling rents’
for each property, shows clearly
why. On Millbank, a 2 bed house
will (according to JLL) fetch £2492
per month on the open market.
In Victoria Park you’ll pay an average of £1387 for a 2 bed flat, in
Cumberland Market, £1820, and in
Lee Green £1235 for a 3 bed flat.
GEORGE PEABODY
threshold of affordability is somewhere around 25-35% net household income. Current Mayoral
guidance in London is that social
rents plus service charges should
not account for more than 30%
household income.
It is obvious that on our estates,
rents set at 60% of market levels in
the vast majority of cases will exceed an affordability threshold of
25-35% income. For new tenants,
80% will be even more unaffordable. This puts Peabody, a charity
expressly constituted to provide
housing for London’s poor, in the
position of charging rents that exceed any reasonable practical definition of affordability for average
earners.
Unsustainable rent increases
About a third of former Crown
tenants are retired, and therefore
on fixed, often very low, incomes. A
significant number are disabled.
Many of these are former regulated
‘fair rent’ tenants who lost that legal
status in the High Court action, an
outcome actively pursued by
Peabody’s barrister. Working tenants are by definition public sector
workers, at present facing real
terms wage cuts of up to 15% over
the next few years. Some tenants
are already reliant on Housing Benefit, and in the current economic climate more are likely to become so.
The new maximum Housing Benefit
cap will be below Peabody rent
ceilings.
Despite all this, some former regulated tenants have been issued
with rent increases of 18% over 2
years. Year on year 9% increases
is also your plan for assured tenants. This will result in rents doubling over 8 years. We must – yet
again – tell you loud and clear: WE
CANNOT
AFFORD THESE INCREASES.
The scandal of empty homes
Transferring and new tenants are
already finding the rent levels demanded impossible to meet. Properties advertised as available in
Property Choice are remaining un1
let for months at a time. The most
recent edition (CBLE 0208) showed
that of 8 flats advertised, only 2
were let. In CBLE 0207, only 4 of
11 were let. In CBLE 0206, only 2
of 6 were let. This pattern persists
all the way back to the start of
Peabody’s ownership. In a few
cases, rents have eventually been
reduced in order to let the homes –
an admission that the rents are unrealistically high.
There IS an alternative!
You, as well as us, need a workable model for these estates that is
financially sustainable for both
Peabody and tenants. Without one,
existing tenants will be priced out.
New ones won’t be able to afford to
move in. And you’ll continue to preside over the fiasco of empty flats
in the midst of a housing crisis, or
be forced to sell homes.
Now that home ownership is permanently beyond the reach of
growing number of people, the UK
urgently needs a new model for
sustainable rented housing. In London, decent family accommodation
is in desperately short supply. As
the GLA recognised during our
campaign, what is virtually unique
about these estates is that, unlike
other ‘intermediate’ rent schemes
aimed at young professionals looking to save for a deposit and then
move on, they have always been
long-term rented accommodation for families. And let’s not forget – they made a healthy profit for
the Crown Estate (a figure of £3
million was reported to the Treasury
Select Committee in March 2010)
as well as building vibrant and
mixed communities. In the midst of
a spiralling housing crisis, that
looks like a beacon of success. In
buying them, Peabody has the
chance to build a model of sustainable, rented family housing that
could be genuinely innovative as
well as meeting the real needs of
key worker families. Good George
Peabody would surely have approved. In celebration of his
legacy, we ask you to work with
us to make it a reality.
AFFORDABLE HOMES FOR
KEY WORKERS AND THEIR
FAMILIES
ALL TENANTS:
PLEASE ATTEND
YOUR RESIDENT
ASSOCIATION
MEETINGS TO DISCUSS DEVELOPING
A CAMPAIGNING
STRATEGY ON RENTS.
Shelter Private Rent Watch, October 2011, available at
http://england.shelter.org.uk/professional_resources/policy_and_practice/policy_library/policy_library_folder/private_rent_watch_report_1_-_analysis_of_local_rent_levels_and_affordability
2
http://www.guardian.co.uk/public-leaders-network/2011/nov/30/autumn-statement-public-sector-cuts?newsfeed=true