Flogging Off the Future

They’re at it again!  Housing Associations, so-called “social landlords” (annual surplus last year £3.5 billion), are flogging-off social rented homes.  The Chartered Institute of Housing has recently said 165,000 homes for social rent have been lost since 2012 and the figure is set to rise.  Privatisation takes many forms, but this is one of the most grotesque.

17 Robinson Road, round the corner from where I live (it’s in Bethnal Green, not Hackney – shows how much they know!), is one of 56 homes owned by Housing Associations (HAs), councils or other public authorities going under the auctioneer’s hammer in the next two weeks (with thanks to Peter Denton for the research).  15 of them are being put up for sale by Peabody, who made a surplus – i.e. profit – of £175 million last year.  Another 4 are being sold by Family Mosaic.  Peabody and Family Mosaic recently formed a merger, one of many in the corporate HA sector.

There are about 4,500 families on the Tower Hamlets waiting list for a home like 17 Robinson Road.  It’s a particularly nice house (formerly owned by the Queen as part of the Crown Estate, before she flipped it to Peabody) in a great neighbourhood, with schools, shops, Vicky Park and transport links on the doorstep.  Getting the keys, with a permanent tenancy and a social rent, could be life-changing for a family who might currently be suffering in temporary, overcrowded, overpriced housing.  These are the people social landlords are supposed to be working for.  Instead, Peabody, whose Chief Executive Brendan Sarsfield had a reported salary last year of £278,750,  are feeding the speculative property market.

If 17 Robinson Road is sold at auction, probably at a knock-down price,  it will either be resold, or more likely, rented privately.  The average price for a 2 bedroom home in Tower Hamlets is £580,000, the average rent is £360 per week.  No chance for the people on the council’s waiting list.

The auction on 26th Feb will be carried out by BidX1, an Ireland-based company.  A UK private equity house, Pollen Street Capital, recently bought a big chunk of BidX1.  Pollen Street Capital used to be the private-equity wing of the formerly publicly owned Royal Bank of Scotland (RBS).  They are looking to extend their activities in to buying “distressed assets” – i.e. people’s homes – in other countries, particularly Greece, Spain and South Africa.

Peabody is happy to play a part in this Great Gatsby-like parable of greed and stupidity.  The housing casino has already done enormous harm around the world, with Ireland and Spain among the most damaged.  RBS was one of several banks bailed out with £1 trillion of our money because of their reckless investment in the property market.  Instead of learning from these mistakes – and perhaps even making amends for them – Peabody and other corporate HAs are helping spin the wheel again.

There’s a very clear alternative path.  17 Robinson Road and all the other social rented homes due to be flogged-off should be immediately removed from sale and made available to the next eligible families on the waiting lists of their respective boroughs.

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1 Response to Flogging Off the Future

  1. Andrew Lloyd says:

    So frustrating and depressing.

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