Author Topic: Fake News - Grenfell Tower survivors getting luxury apartments?  (Read 414 times)

SunshineMeadows

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This was covered across the news channels and not once did I hear that the flats were part of a preexisting plan for social housing, yet it still bugged me that that might be the case.

http://www.independent.co.uk/news/business/analysis-and-features/grenfell-tower-kensington-row-government-luxury-flats-survivors-disaster-a7803356.html

The Government announced yesterday that it will provide 68 permanent new homes to house those affected by the Grenfell Tower fire.

They will be part of the Kensington Row development – described as a “£2bn luxury complex in the heart of Kensington”.

The site is being developed by St Edward, a joint venture between the housebuilder Berkeley Group and the financial services firm Prudential.

The Communities department said the flats will be purchased and managed by the City of London Corporation – the ancient and wealthy municipal institution that runs the City of London.

A property source was quoted in the Evening Standard as describing the provision of the flats as a “huge gesture” by St Edward because the flats were being sold to the CLC “at cost”, meaning the developer made no profit on them.

But is this deal everything that it is being presented as? Is it really as generous as it seems?

What are these homes?

The first thing to recognise is that these are not luxury homes that are being re-purposed especially to help ex Grenfell residents, but unfurnished social housing.

Social housing is specially built to be let out by housing associations at below-market rents to people with low incomes.

Housing associations are not-for-profit companies and charities whose function is to provide housing for the less well-off.

Grenfell Tower fire: What do Kensington residents think of rehousing victims in luxury block?
Would they have been built anyway?

The Independent has confirmed that the homes in question were built by St Edward as a condition of the granting of planning permission by Kensington and Chelsea Council.

Under Section 106 of the 1990 Town and Country Planning Act, councils can require developers to commit to provide a certain amount of social housing in any new private residential development (or alternatively pay a sum of money to the local authority for investment in social housing elsewhere) as a condition for the granting of approval.

This is what St Edward was doing. These social housing flats were always going to be available for use by low-income Kensington residents at some point.

In the absence of this deal The Independent has also confirmed St Edward would have offered the homes for sale to locally based housing associations. These housing associations would then have then have let out the homes at below-market rents.

There are actually two types of social rent that housing associations are allowed by the Government to charge tenants.

"Social rent" means the rent is around 50 per cent of market rates. "Affordable rent" means about 80 per cent of market rents.

The planning documents of the site suggest they were to be social rent.

But, regardless, those rich people in the development who have reportedly voiced their discontent at poorer folk moving in obviously failed to appreciate that they would have soon have had some new low-income neighbours in any event.

Is St Edward taking a financial hit?

Both St Edward and CLC refused to comment on the price at which the flats were sold.

The Evening Standard reported that the flats were being sold for £10m, which would imply an average cost of around £150,000 each, which is certainly well below the market cost of flats in Kensington, where such properties currently go for an average of £1.4m each according to Rightmove.

Yet a source in the social rental sector stressed that social housing is almost always sold by developers at only the cost of production or often below.

This is because the price that social landlords are willing to pay to purchase properties is limited by the rent they are allowed by the Government to charge tenants.

The upshot is that a sale at cost of social housing would not be out of the ordinary and certainly nothing that the developer would not have budgeted for.

Why is the City of London Corporation involved?

The CLC refused to comment on this.

But the Corporation is famously flush with funds, reporting £1.3bn in assets in 2012, and has its own expanding social housing building programme.

It appears likely that it was encouraged to help by the Government.

The Homes and Communities Agency, a government housing quango, says that it brokered the deal between St Edward and the CLC after being instructed by the Communities Secretary, Sajid Javid, to pull out every stop to provide homes for the Grenfell survivors.

So is this fake news?

The idea that St Edward was being especially generous by offering the flats for use in this way certainly is: they were always going to be social housing.

But the developer is undoubtedly helping get the flats ready for occupation faster, which will probably cost them money.

The flats were originally due for occupation between October and December. Now they are expected to be ready at the end of July.

The Government is also helping to subsidise this more rapid turnaround, which a spokesperson said would cost £2m-£3m, with the money coming out of the Communities department budget.

So an accurate way for the Government to have presented its action would have been to claim that it was using public funds to speed up the provision of social housing in Kensington that was already in the pipeline and specifically earmarking it for the benefit of ex-Grenfell residents.

So why didn’t they just say that?

One possibility is that with the Labour leader Jeremy Corbyn putting pressure on the Government to requisition empty luxury homes in Kensington for use by Grenfell survivors, it suited ministers to allow the impression to go out that they were doing something radical along those lines.

JLR2

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Re: Fake News - Grenfell Tower survivors getting luxury apartments?
« Reply #1 on: June 26, 2017, 07:49:25 AM »
Just curious as to how long will these flats remain in the social sector of housing before any tenant housed there with their tenancy from Grenfell Tower, possibly being carried over to these new flats, either look to buy their flat or find themselves being encouraged by the property sharks into buying their new flats under England's right to buy?

Fiz

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Re: Fake News - Grenfell Tower survivors getting luxury apartments?
« Reply #2 on: June 30, 2017, 01:29:37 PM »
I don't think people in housing associations properties can buy their properties and the days in which LA tenants can are numbered.

Sunshine, the report I read was that the social housing was/is being in a separate block within this housing development. And because that social housing would not be ready in time a deal has been brokered that the Grenfell survivors can have some or the earlier completed luxury apartments. These properties have been promised to be fully furnished. Other social tenants will have to wait for the social housing block to be completed because it's only Grenfell survivors that are moving into the luxury fully furnished apartments.

This will cause some problems for the developer and so far answers to certain questions have not been forthcoming. The luxury block has a concierge, will they serve all residents or just the private? There's a cinema complex in the block for free use to the residents. Will this be free to the social housing tenants? Newspapers have asked these questions but there are no answers. I suspect there will be a maintenance charge covering these services which will be unaffordable to social housing tenants. There's no doubt that having social housing tenants living within the luxury block which wasn't intended for them will lower the asking price for the remaining apartments for sale. I suspect that as each Grenfell apartment is vacated (or they're evicted for breaking rules such as overcrowding, getting behind with rent etc) the agreement will be the borough will fund the apartment's interior refurbishment and it will be handed back to the owner of the building to be sold. So over time there will be less and less social housing in that block until it is all private as intended. With the social housing in the block next door.

oldtone27

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Re: Fake News - Grenfell Tower survivors getting luxury apartments?
« Reply #3 on: June 30, 2017, 02:18:31 PM »
I may be wrong but my understanding was that the apartments being offered to ex-Grenfell residents were social housing the developer was required to provide in order to build the luxury apartments, not the luxury apartments themselves.

Fiz

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SunshineMeadows

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Re: Fake News - Grenfell Tower survivors getting luxury apartments?
« Reply #5 on: July 01, 2017, 08:43:35 AM »
Quote
I may be wrong but my understanding was that the apartments being offered to ex-Grenfell residents were social housing the developer was required to provide in order to build the luxury apartments, not the luxury apartments themselves.

Better put than i was able too  >star<

Good link Fiz  >thumbsup<