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£150m sale of Crown Estate’s homes 'will keep rents affordable'
Jonathan Prynn, Consumer Business Editor12 Oct 2010
Hundreds of tenants of the Crown Estate today won a partial victory as they were told they have a new landlord who has guaranteed to keep rents “affordable” and protect their rights.
In what will be seen as a “least worst” outcome for anxious residents, the Crown Estate has agreed to sell its 1,230 homes in London to the respected Peabody Trust housing association.
The deal, subject to six weeks of consultation with residents and final approval by the Crown Estate board, follows months of bitter opposition.
A campaign by tenants on four estates at Victoria Park in Tower Hamlets, Millbank in Westminster, Lea Green in Lewisham and Cumberland Market in Camden, is believed to have knocked about £100 million off the sale price.
The Crown Estate originally wanted about £250 million for the homes, which are reserved for key workers such as nurses and teachers, but accepted about £150 million.
Tenants feared that a new commercial owner would force up rents and break up the estates to maximise profits after almost a century of benign crown stewardship. James Cooksey, of the Crown Estate, insisted the 148-year-old charity, which manages more than 17,000 homes, represented a “safe haven” for tenants.
He said that Peabody had agreed to guarantee rents at between 40 and 60 per cent below market levels and reserve nine out of 10 new lettings for key workers.
High-profile investors who pulled out of negotiations included Max Property, the company set up by entrepreneurs Nick Leslau and Mike Brown, and Grainger, according to Inside Housing magazine.
The Crown Estate had come under pressure from Mayor Boris Johnson to maintain protection for tenants. Brian Munro, a resident of Victoria Park, said: “If the lawyers tell us that the wording of the agreement protects our rents and security of tenure then it would be a step in the right direction. Peabody have a track record of being decent landlords in London.”
The Crown Estate manages a £6 billion portfolio of land, including Regent Street and many other parts of the West End. Profits now go to the Treasury.
A spokesman for Mr Johnson said: “The Mayor remains disappointed that the sale of these vital affordable homes is still being considered.
“Despite the fact that some of the conditions he has called for are being applied to the sale by Crown Estate, if the board decides to proceed, he still wants strong guarantees for all existing and future tenants that these homes will remain affordable.”
Reader views (1)
This is not a partial victory for existing tenants or the preservation of affordable housing for the future.
The above article is not wholly accurate & omits details of peabodys fuure plans.
Firstly all existing tenants will have rents increased to 60% of market rents. Not 40 OR 50% as is the case now. This will push rents up to the region of £650+ a month for a 1 bed flat to over £1000+ a month for 3/4 bed family flats. Not affordable for many.
Secondly peabody will now let vacant flats at 80% of market rent. This will be above what most key workers actually earn earn month. Very affordable.
What does the peabody propose to do with the profits it will make? I suspect it will be used as a subsidy to other parts of their portfolio. This will have the affect of people struggling to pay their rents while others will enjoy low rents & higher living standards partly paid for by others who are crippled by high rents & worse off than them.
The sale is a defeat for existing tenants and a kick in the teeth for many who are looking for geniune afordable housing.
- bob, london, 13/10/2010 14:38
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