Guest post by South Kilburn resident Pete Firmin
South Kilburn Regeneration – building what is needed or building what provides profit for developers?
An acquaintance with more patience than me who closely follows Brent Council documents on the regeneration of South Kilburn recently unearthed the fact that the Council proposes to bulk sell the non-social housing in the current phase of regeneration to a U.S. private equity company, Principal Asset Management. A glance at their website shows Principal Asset Management has no interest in housing as such, but in maximising returns on investment.
This involves 143 `private market units’ in the current phase. Whether a similar deal would be used in the next phase of regeneration (for which a £1 billion contract is due to be awarded shortly) isn’t known, but clearly can’t be ruled out.
The justification for this deal given in Council papers is that the London sales market is "challenging.".
This is a clear indication that these flats are to be sold as `buy to let’. From the earliest stages of the regeneration of South Kilburn, many of the new flats have been sold on the Far Eastern market, this appears to be the first time flats are sold to a foreign owner as a job lot.
All this begs the question “why are flats being built for which there is no market?”.
We have been told from the start of South Kilburn regeneration 20 years ago that social housing to replace that being demolished could only be built if developers could also be built at market rates. This latest venture takes that one step further.
Britain’s, and especially London’s, housing crisis is a crisis of lack of housing which people can pay for while leaving them sufficient to live on. What is desperately needed is housing at social (or preferably Council) rents, not more housing they can’t afford. Terms such as “affordable” which developers and Councils love to use to show how much they care are a smokescreen. The legal definition of `affordable’ is up to 80% of market rent, i.e. unaffordable to anyone on average pay or below.
Principal Asset Management is believed to charge around £2,500 a month for flats in London, not something any of the tens of thousands on Council waiting lists can take on. This bulk sell off just feels like another way of helping the developers make a profit at little risk.
Developers frequently say part way through construction (as happened recently in Camden) that the percentage of social housing they committed to when they were given planning permission is no longer profitable and push for - and usually get - a lowering of that figure. They have Councils over a barrel in negotiations.
Such projects not only fail to deal in the slightest with the housing crisis, but also lead to gentrification of the areas under development, changing the nature of an area without necessarily improving the lot of the original residents at all. On top of which the social housing which is built is, more often that not, of poor quality and smaller and more expensive than that which has been demolished. Social engineering at its worst.
Brent Council needs to recognise that its current approach does nothing to deal with the housing crisis (if anything, it exacerbates it). It needs to not only stand up to developers and their demands, but also fight for a change to national policy. Shelter recently called on the government to “remove the historic debt local authorities owe to the government” for council housing. They say that £29 billion in “historic housing debt” is based on an outdated financial settlement from 2012; that it “sucks away money that could be invested in building new social homes”. Shelter calls for the government to “remove this debt from councils and put it on its own books without affecting the overall national balance sheet”.
Working with other Councils to push for such a change could go much further to provide decent housing for all, rather than cosy deals only helping developers and private equity.
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