Extracts from
Sense of Belonging in Church Street - an inner London
Neighbourhood dominated by social Housing on the Verge
of ‘urban Regeneration’
With special consideration of
Achim von Malotki
Masters Dissertation
King’s College 2015
Tenures and the housing
market in light of current
housing policy
Dissertation was submitted on 27.2.2015 for my MSc course
‘Sustainable Cities’ at Department of Geography of King’s College.
Research was carried out October/November 2014, with electronic
survey for individuals participating in Futures Plan (FP) groups (as
community participants in this urban regeneration plan) and paper
questionnaire for ‘ordinary’ residents/stakeholders not formally
involved with FP.
Aims
1. Identify to what extent and in what way Church Street residents
feel they ‘belong’ to the neighbourhood they live in (please
contact avmalotki@gmail.com if you’re interested in details on
this).
2. Residents’ anticipation of the neighbourhood’s future.
3. To compare characteristics of residents/stakeholders
participating in Futures Plan groups with not formally involved
residents.
Further aims
Tenure and house price research
As affordability of the area emerged as a major concern
for many, additionally a tenure and housing market
analysis was carried out.
This presentation goes further: draws conclusions from
research for Church Street in light of the emerging
Conservative government housing policy.
Part 1
The Survey: Summary Description of Samples
But for PLACE-MAKING it is not just the space
between buildings that matters…
Neighbourhood perception regarding key topics by all participants (scale
of 5 points)
Church Street is ….
Household income of persons indicating Income
Housing tenure comparison between wider public
sample and Futures Plan-participants
Anticipations in a nutshell
• Anticipations of rising property prices and rents
score highest, followed by items depicting mainly
environmental improvements.
• Note the discrepancy of anticipations between “local
environment will be improved” scoring highly and
the anticipation “will be area that people like myself
can afford” second from bottom.
• Chances of staying in the area, especially for young
people growing up in it, are considered as
problematic.
Anticipation scores regarding the future of the neighbourhood
by all survey participants in detail (measured on 5-point scale)
Colouring of
bars: BLUE:
commonly
perceived as
positive
RED: negative
GREY: neutral
Problem perception: "How much are the following issues a problem
in the Church Street area?" Average score out of a scale of 4
Attitudes and anticipations comparison between Futures Plan
participants and the wider public sample
The following slide needs a little explanation…
• Respondents were asked to assess the Church Street ward as they
view it at present using present tense for each item. In another set
of questions they were asked about its future. The wording of
future-related items was identical with those for the present, the
only difference being that the verbs were in the future tense.
• This allowed to analyse the score differences between the two sets
of questions - between how respondents rate characteristics of the
neighbourhood as anticipated for the future compared to how they
perceive these to apply at present.
• A negative score indicates that a particular item is anticipated to
apply less or be occurring less in future than at present. A positive
score the opposite. Obviously, with the item ‘where a lot of people
have difficulty finding a job’, this would be a favourable
anticipation regarding this particular problem.
Score differences of anticipated characteristics of Church Street
compared with those perceived as existing
In a nutshell…
• Significant differences in income, socio-economic status and
educational attainment between Futures Plan participants and
locals sampled from the wider public.
• Nevertheless, with regards to attitudes, problem perception and
anticipation of the neighbourhood’s future, there is a striking
degree of similarity between the wider public sample and FP
participants.
• Prevailing pattern seems to be that FP participants are more
sceptical - surprising insofar as these could arguably afford to be
less concerned with affordability and money matters due to their
higher socio-economic position and higher incomes overall.
• Surprising also because they could arguably be expected to be less
sceptical with regards to the neighbourhood’s future as they
participate in shaping it.
Average scores across household income categories and tenure types
for key items related to affordability (scale of 5 points)
Affordability concerns and anticipation of displacement
appear greatest not in the three lowest income categories, but eminently in the middle ones.
Summary of survey findings
1. Ethno-religious diversity appears to be appreciated primarily as an asset,
however is seen to be negatively affected by neighbourhood change.
2. The view that more higher-income people would be good for the
neighbourhood is absolute not universally shared; particularly those most
engaged with the neighbourhood tend to disagree.
3. If urban development aimed at more income mix means that more affluent
people will move in, the life and prospects for low-income families are seen
as coming under strain.
4. Participants expect that neighbourhood change towards more income mix
will ‘lift’ existing residents by ‘lifting’ the neighbourhood, particularly by
anticipating that it will be easier for people to find employment.
5. There are serious concerns regarding affordability and anticipation of
displacement particularly by those not shielded by a secure tenure (which
currently the majority of those in the lowest income groups have).
6. Given the observed consonance of attitudes, anticipations, problem
awareness and their scepticism, in functional terms the FP participants
represent the neighbourhood population rather well.
Part 2
Tenure Analysis
Of the ward’s 4,719 residential properties
CityWest Homes (CWH) alone managed 3,030 or
64.2% at the end of 2014. These are divided into
two ‘villages’ within the ward: Church Street and
Lisson Green.
On the next table, watch out between the two
‘villages’ in Church Street compared with
Marylebone and St. John’s Wood.
Tenure status of CWH-managed properties in the Church Street
ward 2014 in comparison with 2011 (in brackets)
The state of tenancies in 2011
• When the Futures Plan was conceived, the properties
CWH manages in the ward had been overwhelmingly
tenanted, with only 27% leaseholders, far lower than
the 44% in Westminster overall at the time.
• Buyers in the more affluent areas (e.g. Marylebone, St.
John’s Wood) had stayed put as owner-occupiers rather
than becoming absentee landlords.
• By contrast, in the Church Street ward the majority of
lessee homes was let to other people.
What has changed since 2011, when the
Futures Plan was conceived?
• Within just three years 259 council homes for rent have been lost – more than
the Futures Plan will deliver as ‘affordable’ homes.
• Meanwhile in Westminster overall there has been hardly any shift at all, with
the latest figures showing 45.1 percent leaseholders, 54.9 percent tenants.
Neither has there been much change in the adjacent management ‘villages’ of
Marylebone and St John’s Wood where the share of leaseholds was already high
in 2011.
• The number of leaseholds particularly in the Church Street ‘village’ within the
Church Street ward shot up, increasing its share by 10 percentage points –
almost closing the gap to the Westminster average.
There have been rapid price increases particularly in the inner London housing
market. This, it is assumed, will accelerate the turnover-rate of privatised homes
whereby tenants using their Right to Buy will sublet the home they once lived in or
sell to private investors.
Result: formerly publicly owned homes built to meet the housing needs for lowincome groups unable to meet these needs on the housing market, will be
privately owned and out of reach for these groups.
Tenure change through Right to Buy
• The Conservative-Liberal Democrat Coalition government
‘reinvigorated’ Right to Buy by increasing discounts on the sale price
to tenants to up to 70%, or £102,700 in London, to incentivise sales.
• Right to Buy open to abuse: private companies have been offering
cash incentives (up to £100,000) to tenants to move out so that the
property can be rented out privately at market rates. Locations in
Church Street featured prominently among those targeted by such
practices in a BBC-broadcast.
• Recipients of means-tested benefits like Housing Benefit are not
excluded from exercising their statutory Right to Buy (which forces
the council to sell). In Westminster 22 % of Right to Buy sales are to
people in receipt of housing benefit at time of application.
Remember that Housing Benefit is means-tested and the maximum
of savings allowed for claiming it is around £16,000, nowhere near
the amount for a deposit.
The Right to Buy in urban regeneration areas
• Large numbers of tenants in London exercise their Right to Buy where
and when a regeneration scheme is announced (Association of London
Government 2003: 4).
• Anticipation matters: if an area is destined to receive inward
investment and a rise in its popularity is expected, sitting tenants will
be encouraged to buy, causing what is termed ‘in-situ change’ of the
neighbourhood.
• In housing economics it is well established that any investment that will
make the area ‘nicer’ – be it amenities and attributes like a much
embellished public realm – will be capitalised by the housing market
into house prices or private market rents.
• Particularly in times of a housing market with large increases in value of
properties, it may take not more than just anticipation of these things
to come to cause this effect.
Look who’s keen…
Privatisation and Commodification
•
•
•
•
•
Privatisation: sitting tenant acquires the flat he/she lives in through
Right to Buy and becomes a lessee (home owner).
Commodification: formerly publicly owned (hence non-commodity)
housing enters the housing market when the lessee sells the home –
either to an owner-occupier, or (much more frequently) to a
commercial buyer who wants to let it.
In the private rental sector the home becomes a commodity to
extract rent from.
Owner-occupier homeownership increases only temporarily through
the Right to Buy. In the long term, private renting increases as many
owner-occupiers sell or sublet at some point.
As private renters tend to spend a large part of their income on rents
(increasingly over half of it), their purchasing power may be limited
even if they have comparatively high incomes.
Why this matters for Church Street
Private sector rents in Church Street 2012, even though they are
well below Westminster average are:
Median rent for a 1-bedroom flat: £375 per week.
Median rent for a 2-bedroom flat: £594 p/w.
(If you rank all flats according to the rent paid, the median is exactly in the
middle of that ranking.)
When commercial landlords snap up properties that once
were publicly owned it’s not just ownership that changes:
• The neighbourhood will change as well if homes are let at high
rents to a transient population. Two thirds of private renters in
London reside in their homes for less than three years.
• Recent government legislation explicitly allowed short-term lets in
the private rental sector.
• High population churn will lead to greater numbers of people not
rooted and not participating in the neighbourhood.
Why this matters for Church Street
Private sector rents in Church Street 2012, even though well below
Westminster average, are:
Median rent for a 1-bedroom flat: £375 per week.
Median rent for a 2-bedroom flat: £594 p/w.
(What’s the median?: If you rank all flats according to the rent paid, the median is
exactly in the middle of that ranking.)
• When commercial landlords snap up properties that once were
publicly owned it’s not just ownership that changes:
• The neighbourhood will change as well if homes are let at high rents to a
transient (fast-changing and moving) population. Two thirds of private
renters in London reside in their homes for less than three years.
• Recent government legislation explicitly allowed short-term lets in the
private rental sector.
• High population churn will lead to greater numbers of people not rooted
and not participating in the neighbourhood.
Part 3
House Price Analysis with the official Land Registry
Dataset, indicating the prices paid when homes were sold
Number of cases (homes) each year:
Median house prices in comparison since 1999 (from 1999 to 2011
two-year-intervals, since 2011 annually; YTD: ‘year to date’)
Development of median house prices (index 1999=100)
Conclusions from the house price data analysis
• In comparison with 1999 and relative to the original
investment made, ex-council homes in the Church Street
ward offered the highest returns in 2014 of all categories.
• Homes in the Church Street ward overall (that include excouncil properties) start to outperform in relative terms both
Westminster & Camden and London overall early on, from
2001 consistently until 2014.
• No particular effect due to the inception of the Futures Plan,
which would have left its mark since 2011, is noticeable.
• Substantial profit is made when former publicly owned
homes, purchased at a discount, are resold on the open
market. Not only does the buyer benefit from the (increased)
discount, but homes are commonly also undervalued when
the council is selling them to council housing tenants who
demand to buy the homes they live in.
What does this mean for local residents?
• Estimated average annual household income for Church Street is £31,134, the
median annual household income merely £19,572 (GLA Household Income
Estimates 2014).
• The ratio of ex-council homes prices for 2014 versus average local annual
household income would be 13.4, with regards to the median annual household
income a staggering 21.3. For homes overall in Church Street the ratios would
obviously be higher still.
• House prices in Church Street, including those formerly part of the publicly
owned stock, are out of reach for but a few of the ward’s residents.
In other words:
If they do not already own a home, the vast majority of Church Street
residents has effectively been priced out of their own neighbourhood.
Moreover, most Church Street households are also unable to access the
private housing market (owning or renting) in most other parts of London.
Final Part
What has happened since this research was carried out?
Trend:
• Accelerated shift in housing from local authorities to
wealthy landlords.
• One third of former council stock now let privately.
Policy:
Tenure changes at a time of rapidly rising house prices in
central London locations (like Church Street) have shown to
be fully intentional.
Conservative central government legislating for shifting
subsidies away from the supply of social housing (abolishing
the social housing grant) towards selling off the social
housing stock by subsidising sitting tenants who want to buy.
Remember: the median price of £417,500…
…. and then think of the planned extension of the Right to Buy to Housing Association
tenants, to be paid for by forcing councils to sell off the properties that fall within the
most expensive third of all properties within their areas as they become vacant.
• At present (9/2015), local authorities in London are negotiating with central
government about the application of this policy: will it apply to Greater London
overall, or to smaller local housing markets at borough-level?
• The question if the housing market in Greater London or in the City of
Westminster will serve as baseline will most likely decide on the fate of Church
Street’s council housing stock.
• Prices above which council-owned stock has to be sold if Greater London is chosen
as the baseline (Inside Housing 4/2015)
If Greater London’s average house prices are set as baseline,
Westminster City Council is likely to be forced to sell much of its stock
in Church Street.
What happens if average house prices in
Westminster are set as baseline for the sell-off
of council housing?
If Westminster City Council is forced to sell council homes
not in Church Street but in more expensive wards, this
would lead to a further residualisation, i.e. the shrinking of
the pool of people eligible for social housing in Church
Street:
Only the most needy and vulnerable, those in highest
priority need on the housing list (often with significant longterm health problems) would have a chance to be housed in
what remains of the social housing stock in Westminster.
This is what the UK government seems to want:
Look at the estate agents’ ZOOPLA property heat map, overlaid with the Church
Street ward boundaries:
The aim would be to turn those green areas in central London RED. This would mean
that homes on high-value land are generating property prices to match.
Why the privatisation of the social housing
stock must not be confused with gentrification
• Gentrification is commonly defined as a phenomenon of urban
social change whereby members of the middle classes change their
location preferences to live in formerly predominantly working class
inner-city districts.
• However, what is described here as privatisation is not happening
‘organically’, for example by changed demand in the housing
market.
• UK privatisation policy is highly coercive – it relies on stealth
through legislation. Does not shy away from relieving independent
(charitable) companies like Housing Associations of their assets.
• Subsidies are shifted away from the social housing sector to its
privatisation.
• Policy will – and is intended to - alter the social make up of
neighbourhoods, particularly in central London.
One of the consequences: exclusionary
displacement
What does that mean?
• A household very similar to that of a former council tenant
whose home has been sold, will be excluded from living
where it would otherwise have lived.
• The household is generally excluded from areas where the
housing stock has been commodified.
• The displacement is not physical (not removing people), but
economic (through house prices).
• Following the general rule that land value falls with distance
from the city centre, only low-value areas (think Barking &
Dagenham or the banlieue of French cities) would remain for
the displaced.