Empty promises: London’s housing crisis

With Christmas around the corner, Londoners are getting into the seasonal spirit – consuming, celebrating and spending.

Yet despite the prosperity evident around parts of the capital, there are many who’ll struggle through this festive period.

Affordable rent in London has become a rarity. Property prices are soaring. According to HomeLet England, the average new tenancy rent in London has seen an increase of 8.2 per cent between September 2013 and September 2014.

It’s now £1,466pcm, £728 higher than the rest of the country.

Long-term tenants are being pushed out of their local areas by these unsustainable rising rent costs – benefit caps and new measures like the recently instated bedroom tax mean that lower income households can no longer afford to live in London.

Reports of families unable to afford their rent are an everyday occurrence, struggling with housing benefits capped at £500 per month – a sum insufficient to make ends meet for most working-age households.

Being displaced from the homes and communities they’ve lived in for decades is a very real threat for London’s working and middle class, and a trend that many are labeling ‘social cleansing’.

The New Era estate in Hoxton is a representative case in London’s housing crisis. The estate was recently purchased by American investment firm Westbrook, and management was initially handed over to Tory MP Richard Benyon’s family company.

However, The Benyon Estate recently withdrew following heavy protest action by the New Era 4 All campaign group and media support from Russell Brand.

Although activists consider the Benyon retreat to be a victory, Westbrook is now free to raise costs without internal pressure from the British government.

Now, tenants of the New Era estate face imminent eviction, with Westbrook announcing rent increases of more than 300 per cent.

Empty homes

Putting empty homes back into use is one solution to the displacement of many local residents who can no longer afford to meet the rent hikes enforced by private landlords.

Research by the charity Homes From Empty Homes suggests there were 59,313 empty homes in London last year, with 24,056 of those classed as ‘long-term empty’ (vacant for longer than six months).

A year has passed since Mayor Boris Johnson announced his Greater London Authority (GLA) strategy in an attempt to remedy the London housing crisis, but Paul Palmer, Managing Director of Empty Homes UK, says the results aren’t promising.

“The GLA hasn’t really helped. There’s been plenty of lip service from Boris, but his last attempt of providing a £60 million grant to bring over 1,000 empty homes back into use has resulted in about 100. You could’ve bought 300 empty homes at £200,000 each for that money.

“In fact, the overall programme from the Homes and Communities Agency (HCA) was for around 6,000 empty homes across the country to be grant-aided back into use. So far, around 1,200 have been done, with just four months of the programme to go.”

As Palmer points out, local authorities have various powers available to them to tackle the issue of empty homes, but many are simply not able, or willing, to do so: “They have the power to Compulsorily Purchase, the power to enforce a lease as part of a management order, the power to serve notices to see property brought up to a reasonably good condition even if empty, so as not to become an eyesore.

“The reasons they don’t utilise them fully are due to staffing issues. Many authorities have got rid of their full time empty homes officer. High costs are another factor – which council is prepared to spend £5 million of public money on a long-term vacant private house, in the hope they can sell it on? And serving Notices costs money, especially if the owner doesn’t comply. Who will do the works then?”

Palmer argues that there simply isn’t enough pressure on local authorities on a national level, something he feels should be a compulsory priority: “The government have never made the work of empty homes officers in local authority a statutory duty, and that’s the key. If a local authority HAS to do it, then they will; if it’s optional, then they won’t. It’s that simple.”

According to Parliament briefing papers on empty housing published in June 2013, priority when dealing with empty properties has been given to those that have “become magnets for vandalism”. This suggests bringing empty properties back into occupation for social housing purposes has become secondary.

Additionally, the government’s decision to increase the time period before Empty Dwelling Management Orders (EDMO’s) can be imposed on empty home owners from six months to two years, could be seen as a regressive approach to the issue.

Ironically, the Parliament briefing papers claim this move “stand(s) up for the civil liberties of law-abiding citizens,” as it was felt to be unfair on homeowners to be so time constrained when selling or renting out their property.

‘Ghost mansions’

One worrying trend in the London housing market is the proliferation of ‘ghost mansions’ – expensive properties bought as investments, often by overseas buyers, and left empty for long periods of time.

Palmer’s research into the area suggests there are more than 700 such properties in London worth in excess of £5 million, totaling £3.2 billion – enough to build 10,000 affordable homes.

“The uniqueness of London’s housing crisis comes with the element of overseas investors, who decide that prime central London properties are valuable pieces in a real life game of Monopoly.

“I have proof positive that some of these properties have been bought with money illegally siphoned out of eastern European countries, and many are bought simply as a means of hiding huge profits, the properties being left empty as a tax write-off. Of course, some are bought as very long term speculative investments.”

So how does Palmer suggest the issue of overseas investors and ‘ghost mansions’ could be tackled?

“If a property has been vacant for more than five years, then a yearly tax of 5 per cent of the value of the property should be charged. This should increase by 5 per cent year on year. Hopefully this tackles any idea of speculative investment.

“All homes in London empty over five years should have a restriction enforced that a sale can’t take place without the consent of the local authority. In others words, a restrictive covenant.

“The local authority should ask to see details of the plans to bring the property back into use within a certain time frame – determined by the authority, with an agreement that compulsory purchase will take place if this isn’t adhered to.”

Social cleansing

Away from wealthy private investors and empty mansions, one grassroots movement in east London has steered the issue of empty social housing into the national spotlight over the past 12 months.

E15 is the campaign group founded by a group of young mothers evicted from a hostel in Stratford in October 2013 by the East Thames housing association, following cuts in funding from Newham council.

When they approached the Newham housing office for support, they were told to look for private rented accommodation in Birmingham, Hastings and Manchester.

Whilst Focus E15’s battle is local to Newham – a borough that has seen a 62 per cent rise in homelessness in the last year. It’s a story that is a familiar one across the capital.

According to data from charity Thames Reach, 14,220 households in England were placed in temporary accommodation within another local authority last year, due to statutory homelessness.

93 per cent of those re-homed away from their communities were from London boroughs.

In the past year, Focus E15’s campaign has gained support and media attention nationwide, bolstered by their decision to ‘re-occupy’ abandoned social housing flats on the Carpenters estate in Stratford.

As campaigner Liam Barrington-Bush explains, it was a decision made to highlight the ongoing threat of what the group believes to be ‘social cleansing’: “There are 400 flats on the Carpenters Estate that have been empty for six to eight years and we showed when we opened them that they are perfectly liveable. But that’s not the story that’s being told.

“Basically it’s this gradual process, even if it’s not set explicitly, local authorities in London are trying to move people out. To sell the land off to private developers to build more high-end, high-rent housing for people to come into the borough and make Newham a place for business commuters going into the city and things like that, rather than communities that have been here for so long.”

According to Barrington-Bush, the crisis surrounding social housing is one that both Westminster and local authorities should he held responsible for. “The coalition government has set a new low, in terms of absolute disrespect for the needs of working people across the city and the country.

“Right now Newham council is Labour-run, and they’ve been very instrumental in dismantling council housing across the borough. First, handing it off to the so-called ‘social landlords’ – the housing associations – that are doing their dirty work for them, kicking people out on the street, telling them they have to move to Hastings, Birmingham or Manchester if they want to live in an affordable home.”

Homelessness

Another consequence of the housing crisis is homelessness – London has seen a 64 per cent rise in rough sleepers in the past four years; Thames Reach estimates that around 6,500 people slept rough at least once in London between 2013 and 2014.

The number of beds for homeless people fell by more than 30 per cent in this same period, according to Darren Johnson, who chairs the London Assembly’s Housing Committee and who is a Green Party member.

In a borough that many perceive to be one of the richest in the country, where political and financial power is dominant – the City of Westminster – inequality is rife, particularly with regards to housing.

In the Church Street Ward (one of the highest concentrations of social housing in London), 78 per cent of children live in income-deprived houses, according to the 2012 council profile.

The Empty Homes Agency research shows Westminster has one of the highest concentrations of long-term empty housing in London – ranking second in 2013/14 after Kensington and Chelsea.

According to Homeless London, the borough has the highest concentration of rough sleepers in London, with a count of 2,197 in 2013/14.

Back in 2011, the Tory-led Westminster City Council proposed a bill banning soup kitchen runs for the homeless around the Westminster Cathedral Piazza as a result of the distributions supposedly “encouraging congregations, turning it into a no-go area for many residents.”

It was only thanks to the efforts of a handful of homeless associations that the legislation was dropped. The charity Housing Justice called this attempt “over the top” and “an attack on civil and religious freedoms.”

To be eligible for social housing means adhering to a strict range of criteria, and most ‘single homeless’ don’t fit them.

Furthermore, where funds used to be ring-fenced to maintain homeless aid, since 2010 local governments have been granted the flexibility to spend the money on wider welfare services.

This came at a time when local authority budgets from central government were being reduced as part of wider austerity cuts.

According to Inside Housing, funding for single homeless people has been reduced by a quarter since the last election.

The No Second Night Out (NSNO) project is a pilot project launched in 2011 with the aim of preventing new rough sleepers from becoming long-term homeless.

It strives to establish contact with rough sleepers on the first night they spend on the streets, in the hope of it remaining a one-off.

“The Mayor’s NSNO project is a good example of a service which can most effectively be provided on a pan-London basis, but it doesn’t always receive the level of support from all the London boroughs that it should,” says Johnson.

“Some boroughs are increasingly unwilling to take on responsibility for hosting the London-wide NSNO hubs, presumably because of fears that the hubs would act as a magnet, drawing in more homeless people with little local return – though there’s no evidence to substantiate those concerns.”

Yet again, local authorities appear to be shirking their social responsibilities when it comes to London’s most desperate.

Assured Shorthold Tenancy terminations were thought to be the cause of 36 per cent of homelessness cases in the first term of 2014, a rise of 400 per cent in the past four years. In other words, private housing contracts end, rents rise, and people are put out onto the streets.

According to CHAIN (Combined Homelessness and Information Network) 15 per cent of new London rough sleepers inthe past year became so when they were no longer able to pay their rent.

The old adage ‘you’re only two pay packets away from the street‘ has never rung more true.

Power to the People?

Those looking for some kind of summary of this complex web of issues should look to a recently published independent report by the London School of Economics and the Institute for Social and Economic Research at the University of Essex.

The economists found, perhaps unsurprisingly, that tax and welfare measures implemented by the coalition government have failed to spread the consequences of austerity or the benefits of economic improvement fairly; instead, the wealthy are better off and the poor have been hit hardest.

With the 2015 elections drawing closer, opposition politicians will no doubt use these troubling findings to demonstrate the failings of the coalition.

Empty housing, homelessness and social cleansing have become intrinsically linked, and ongoing symbols of the government’s mismanagement of the financial crisis.

However, for a growing number of disillusioned across London and the rest of the country, the answers to these issues don’t lie with ineffectual politicians, but with grassroots movements such as Focus E15 and New Era 4 All.

Perhaps, the power now lies with the people?

 

Words by Ed Oliver and Tanwen Dawn-Hiscox

Featured image by Hannah Hutchins