A presentation of my MSc Dissertation at King's College to local stakeholders and local authority representatives, with special consideration given to local tenure and housing market analysis.
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Sense of Belonging in an inner London, social-housing-dominated Neighbourhood on the Verge of ‘urban Regeneration’
1. Achim von Malotki
Masters Dissertation
King’s College 2015
Extracts from
Sense of Belonging in an inner London, social-housing-
dominated Neighbourhood on the Verge of ‘urban
Regeneration’
With special consideration of
Tenures and the Housing
Market in light of current
housing policy pledges
2. Part 1
The Survey: Summary Description of Samples
But for PLACE-MAKING it is not just the space
between buildings that matters…
6. Anticipation scores regarding the future of the neighbourhood
by all participants in survey
Colouring of
bars: BLUE:
commonly
perceived as
positive
RED: negative
GREY: neutral
7. 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.
8. Problem perception: "How much are the following issues a problem
in the Church Street area?" Average score out of a scale of 4
10. 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.
11. Score differences of anticipated characteristics of Church Street
compared with those perceived as existing
12. 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 consonance between the wider public sample and FP
participants.
• Prevailing pattern seems to be one of more pronounced scepticism
among FP participants - 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.
13. Average scores across household income categories and tenure types
for key items related to affordability
Affordability concerns and anticipation of displacement
appear greatest not in the three lowest income categories, but eminently in the middle ones.
14. 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 seems to be far from 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.
15. Part 2
Tenure Analysis
Of the ward’s 4,719 residential properties
CityWest Homes 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.
16. Tenure status of CWH-managed properties in the Church Street
ward 2014 in comparison with 2011 (in brackets)
17. 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.
18. 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.
With the rapid price increases seen particularly in the inner London housing
market, the turnover-rate of privatised homes - originally allocated on grounds of
need - may well accelerate, both by selling and letting formerly publicly owned
homes privately –
BUT not to those unable to meet their needs on the housing market.
19. Tenure change through Right to Buy
• 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. In
Westminster 22 % of Right to Buy sales 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.
20. 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 febrile housing market it may take not more
than just anticipation of these things to come to cause this effect.
22. • The assumption that Right to Buy would permanently
expand homeownership - with it all its supposed social
and financial benefits - may simply not materialise if
formerly publicly owned (hence non-commodity)
housing enters the private rental sector through the
commodification process.
• Private sector tenants are more transient than council
tenants and owner occupiers – hence community
stability and sustainability may be negatively impacted.
• They also tend to spend a large part of their income on
rents, increasingly commonly above 50%, so their
purchasing power may be limited even if they have
comparatively high incomes.
23. Part 3
House Price Analysis with price-paid Land Registry
Dataset
Number of cases (homes) each year:
24. Median house prices in comparison since 1999 (from 1999 to 2011
two-year-intervals, since 2011 annually; YTD: ‘year to date’)
26. Conclusions from 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 ex-
council 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 perceptible.
• Substantial profit to be made when former publicly owned
dwellings, purchased at a discount, are resold on the open
market. Not only does the discount benefit the buyer, but
homes are commonly also undervalued.
27. What does this mean for local residents?
• Estimated mean annual household income for Church Street is £31,134, the
median annual household income merely £19,572 (GLA Household Income
Estimates 2014).
• 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.
• Ratio of ex-council homes prices for 2014 versus 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.
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.
28. Remember: the median price of £417,500…
Conclusion:
The privatisation of the social housing stock will change from Right to Buy
to a policy of stealth: this will – and is intended to - alter the social make up
of neighbourhoods, particularly in central London.
…. and then think of the Conservative Party manifesto pledge to extend the Right
to Buy to HA tenants, paid for by forcing local authorities to sell off properties
that fall within the most expensive third of all properties in their area as they
become vacant. Note that Greater London is viewed as baseline local authority,
not Westminster (Inside Housing, 14.4.2015).
Prices above which council-owned stock has to be sold (Inside Housing, ibid):
29. Policy aim: closing the ‘rent gap’
What is the rent gap?
• Difference between value of (disinvested council) housing stock and
the potential stock value that would take account of the highly
valued land it sits on.
• Neoliberal (market-dominated) policy thinking (prominently Alex
Morton, the Prime Minister’s housing advisor) wants to close rent
gaps in inner London. This is done by:
Privatisation and commodification of hitherto publicly owned
housing stock in areas of high land value.
Creation of a housing market where it had previously been
subdued due to publicly owned housing stock being allocated to
low-income residents at sub-market rents.
If local authorities support the aim of yielding maximum returns
from valuable land, this land may remain publicly owned but the
the housing stock on it is gradually transferred into the property
market through Right to Buy.
The Conservative Manifesto pledge appears to go further and
could entail that councils lose freeholds on properties.
30. Identifying areas for rent gap closure
ZOOPLA’s property heat map:
The rent gap is closed when those green areas in central London turn RED
31. Exclusionary displacement
What does it mean?
• A household very similar to that of a former council
tenant whose flat 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, but economic.
• 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.
32. Private sector rents in Church Street 2012
(well below Westminster average):
Median rent for a 1-bedroom flat: £375 per week.
Median rent for a 2-bedroom flat: £594 p/w.
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.
33. If WCC is forced to sell council homes not in Church Street but in
more expensive wards, this would lead to a further residualisation
of social housing in Church Street:
Only the most needy and vulnerable, those in highest priority need
(often with significant long-term health problems) will have a
chance to be housed in the remnants of the social housing stock.
Hinweis der Redaktion
Anticipations of rising property prices and rents above those of mainly environmental improvements. Chances of staying in the area, especially for young people growing up in it, are considered as problematic.