UPDATED: Nov 12th 2011: Regular readers of this website will know that we have a particular loathing for property developer Oakmayne who have been throwing up buildings in the local area for quite a while now (see Appendix below). Even though we have no love for LendLease, at least they try to pretend that it is interested in what local people say and want. Oakmayne’s history in the North Southwark area is really at the other end of the scale – arrogant, crass but omnipotent! Their large site on New Kent Rd and Elephant Rd has been subject to lots of delays over the years but now the plans are out there, the brochures are being emailed out to interested persons and the hype is on. Here we have two towers of flats, one tower of student housing, four restaurants, a Sainsbury, a digital cinema and a small market place outside.
Comprised of 243 student rooms, 146 one-bedroom flats, 190 two-bedroom flats and only 37 three-bedroom flats, the starting price is £299,990 for a one bedroom. There are no socially rented flats in the development. Even the annual service charge on a one-bedroom flat works out at about £57 per week! Simple question: Where you ever asked anything about this development?
Sales:
1 Bedroom Apartment from £299,900
2 Bedroom Apartment from £375,900
3 Bedroom Penthouse from £860,000
Projected Rental Return:
1 bed £355 – £425 pw
2 bed £435 – £535 pw
3 bed £720 – £950 pw
Estimated South Tower Service Charge
1 bed £2,040 – £3,000 pa
2 bed £2,550 – £3,270 pa
3 bed £3,610 – £4,500 pa
FROM OAKMAYNE PLAZA TO TRIBECA SQUARE
Oakmayne’s dimwitted rebranding of what had been called Oakmayne Plaza as ‘Tribeca Square, New London’ seems stupid on many counts. Tribeca is famous for being a posh district in New York, not London. Why would a part of London need to be called Tribeca? So if it’s New London, why is named after something in New York? If they want to have some of the cachet of Tribeca rub off on The Elephant then they should go and visit Tribeca and see that it is made up of ex-industrial and warehousing buildings from the period 1860 to 1920’s that are historically worthy of saving. But Tribeca Square is made up of three bland new build towers with some retail at the base and a piddly market at the side, all of which will probably be pulled down by the year 2040 and replaced by something equally as demolishable. But if you look at it from Oakmayne’s point of view than you realise that calling the development The New Elephant is not going to attract many buyers. So maybe it’s a crass but shrewd move?
HOUSING FOR LOCAL LONDONERS? WE DON’T THINK SO!
When you read the brochure for Tribeca Square, you see that it is primarily aimed at global investors who are looking for good returns on properties worldwide but especially in the UK where the pound is weak against other currencies. These are the investors who are flicking through the same kind of brochures and attending property launches in swanky hotels for new developments in Sydney, Vancouver, Mumbai, Rio de Janeiro or any city where development is being given a free reign. You can see Tribeca Square being marketed in this way here for investors in Hong Kong. The article text is copied straight out of the Tribeca Sq brochure. The launch was at The Landmark Mandarin Oriental 5-star hotel from November 4- 6th, £500 pound a night for a single room. It was launched here in Singapore for investors on 28th, 29th & 30th October at The Hilton Hotel. You can see a Chinese newspaper blurb here too. Some pics from Singapore:
Oakmayne doesn’t even try to be candid about the fact that they are building over-expensive housing for investment and profit making rather than for Londoners who need homes . They don’t care who actually buys them, or even if anyone who buys one will actually live in them, as long as they are sold. It’s this openness on display when they write:
‘Recent research by CBRE has shown that above and beyond normal market growth, house prices in regeneration zones have been found to have an annualised 4.9% growth rate over the period of regeneration…Residential prices in central London have risen since March 2009, and residential property in the capital continues to be seen as a safe, stable and lucrative long term investment by investors from around the world. Whilst domestic buyers are happy to purchase a product that may need refurbishment, rental tenants and overseas buyers tend to want a high quality finished product. The lettings market remains buoyant (sic), helped by an influx of tenants from continental Europe…Elephant & Castle, with its Zone 1 location right in the heart of central London, currently remains undervalued in relation to the districts that surround it, an indication that an investment now will have benefits in the future. With its mixture of iconic new buildings, historic Victorian buildings, quiet side streets and local parks, Elephant & Castle has a cosmopolitan and city-centre ambience. The retail and leisure hub of Elephant & Castle is undergoing planned regeneration which, along with planned transport improvements, should help to further lift residential values…Elephant & Castle and the other inner London districts have always demonstrated sustained growth in prices and values over an extended period of several decades. With its high population density forecast to increase, London benefits from demand outstripping housing supply. Pricing should be further protected by restrictive planning procedures…Inner London will continue to remain a hotspot for international investment and the capital continues to lead the UK as the main centre for job creation, financial trading, legal advisory, consultancy businesses, inward investment and corporate expansion. All these factors will help to ensure that the local housing market remains sustainable and for the right high quality product there will continue to be an upward pressure on residential prices…There are many reasons why investors from abroad find the UK property market so attractive, but one of the most important is tax. UK regulations treat overseas landlords generously, and recent changes to the law have made the tax climate even more liberal’
Doesn’t really seem to say much about enjoying your new home but says a lot about global investors property portfolio’s. Recent housing activity in The Elephant area reported that ‘30% of flats in new development at corner of New Kent Road & Harper Road were sold in Singapore‘. Get the global picture yet?
These London property market reports prepared by global property consultancy King Sturge make fascinating reading especially if you like to read from the point of view of the rich and how the rich stay rich: ‘Several key themes are likely to mean that both sales and lettings markets in Prime Central London remain vibrant and active during 2011.The flight to quality, the safe-haven benefits, the immunity from austerity measures and the funding advantages of the rich and super-rich are all likely to mean that demand at the top end of the London residential sales market remains strong this year despite a more dour mood elsewhere in the country’.
Download some of their reports here, here and here! Enjoy, as we say!
Also this:‘ King Sturge has sold 1500 homes in London to buyers, mostly in Asia, on 28 developments in the year to March worth some £500 million. To put that into context, Knight Frank says the total sales to Asian buyers in the same period was £761 million…Simple arithmetic will tell you that King Sturge’s average sale price of £333,000 won’t buy you a broom cupboard on Bankside. But Tim Wright, who heads the sales teams based in Kuala Lumpur, Hong Kong and Singapore, says that the market has always been there for midpriced flats bought unseen and off-plan at roadshows in Asia…These markets, especially where there is a historic link to the UK, can be treated as subsidiary to the home market. London is a leader not only in commerce but also education. The city is seen as a safe haven for overseas buyers to purchase a pied-à-terre — or for their children to use whilst gaining higher education.’
NEW LONDON? SAME OLD SH*T
When Oakmayne trumpets New London the New London they are trumpeting is the very same London that has been trundling along with a few people doing alright and a load more people struggling. It’s not hard to see the inequalities of London these days. Everyday it gets more apparent. Southwark Notes noticed a few people camping out in Burgess Park the other day (before the hoardings went up). New York, as well as being similar to London in being a capital of the finance industries and crazed property speculation, has a similar trajectory of the wealthy being enticed back into the inner city once it had been made ‘safe’ with a brutal displacement of local working class communities and a State / Police policy of harassment of the homeless population that was so violent that thousands of the homeless people had no choice but to flee to outside the NYC area.
The history of Tribeca in New York is similar to places such as Hoxton and Spitalfields and Covent Garden in London. Once a ’gritty, light-industrial corner of Manhattan’s lower West Side’ its gentrification began in the 1970’s when the nearby rents in SoHo area went through the roof. The artists who had first opened up SoHo as a new hip quarter of town were soon priced out and moved to Tribeca which then underwent a similar cycle of eviction and displacement, the catchy new moniker TriBeCa (or, Triangle Below Canal Street) only being invented as a good sounding name for estate agents to pitch the area with. Since the 1980s, large scale development and conversion of the area has transformed it into a super-upscale residential area Tribeca now bring one of America’s most fashionable and desirable neighborhoods and known for its celebrity residents and its 10013 zip code being New York City’s most expensive. The unprecedented feeding real estate frenzy in Tribeca in the late 80’s and 90’s has been likened to “truffle pigs” following “the law of the market”. Why we could ask would The Elephant & Castle need something such as this?
EVERYTHING IS OKAY. GO BACK TO YOUR HOUSES!
“Homelessness exists not because the system is not working but because this is the way it works”
Peter Marcuse
You could just as well substitute the word ‘poverty’ for ‘homelessness’ and the equation would be just as sharp and precise. If we focus in on Southwark and look at the housing waiting lists we can see that there are 1000’s of people who need housing. These are people who need a place to live and are waiting to be housed in public housing. We can assume that most of these people are either working poor or unemployed and we can presume that many of these people work in low-wage jobs such as retail, security, delivery, cleaning, office work and so on. They will never be eligible for what is laughably known as ‘affordable’ housing or even the new buzzword ‘intermediate‘ housing. An estimated 866,000 households in Britain fall between public housing availability and private rented affordability. What they need is cheap and quality public housing. The question remains: why are houses not being provided for these members of our local society?
It’s simple really. In this present day and age, housing means big money for those in the housing industry from investors to developers to construction firms to insurance companies to estate agents. But housing is a social resource like our parks, libraries, health centres and so on. You could even say that decent cheap housing is a ‘social wealth’. Housing and house-building for all is not something that should be left solely in the hands of the private sector or free-market because money-making will always override the common sense that everyone needs a home and not just those who can afford expensive places outright or those who are fleeced by paying £300,000 for a single bedroom flat in a crappily built new development. The housing free market is never really a pure one anyhow but is heavily subsided with public money from taxpayers pockets and handbags through numerous Single Regeneration Budgets, Homes and Community Agency payments, tax breaks and incentives, regeneration zones, New Deal for Communities etc. All of these helping hand-outs have played a part in the destruction and loss of public homes in The Elephant and Walworth area.
THE BUILDING OF HOMELESSNESS
Have you ever thought that regeneration of an area increases the amount of local homelessness? With all those new developments in The Elephant, Bermondsey, The Borough and so on, that has to be good, no? Well, you might see new flats going up but the cost is an increase in homelessness through loss of public housing and public land where new housing could be built for poorer people, loss of local affordable rented flats, loss of vital family housing, loss of local networks of employment and advice and community wisdom all of which are how poorer people house themselves. Not only does displacement from an area displace the immediate folks and families from where they were living, it also has a knock on effect of displacing the future sons and daughters of those people.
If we look at the recent removal of Heygate tenants, those tenants did not disappear into thin air! Through the demolition of the estate 1000+ units of public housing were lost. That’s 1000+ less available flats for those on the waiting list. The decant process also means that tenants were taken out from existing council flats and moved into other already existing council flats. That’s a lot of households that needed to be found within the Southwark Council housing stock placing further pressure on availability for those on the waiting list. Worth noting again here that the LendLease plans for regeneration of The Heygate site are talking about only 13.5% of all the new flats being for social rent as opposed to 100% of the original Heygate Estate.
Peter Marcuse, the writer on housing who we quoted above, writes a lot of good stuff about displacement. He has analysed how homelessness is created and broken it down into three inter-related ways:
1) The Profit Structure of Housing which means homes are built for the profits of developers and not to satisfy desperate housing need. In London there is an absolute crisis in housing whereby thousands of people need cheap and secure and good quality homes but their needs are not being taken seriously. Instead the profits of developers or investors (and this includes those who buy Council Homes to let them out to private tenants at inflated prices) are first and foremost what seems important.
2) Income inequality in society. The gap between poor income and rich income has never been greater.
3) Government policies on housing, work, finance etc. Politicians in the U.K (and elsewhere, of course) still believe that an economy run on the back of an unsustainable overpriced housing bubble and massive levels of personal debt is still a good way to run the country despite the crisis from 2007 to the present day in the housing sector.
WHAT CAN WE SAY ABOUT SOUTHWARK RIGHT NOW?
Let’s take the above three notions and dig into some statistics from Shelter, the housing charity who maintains its own databank that it sources from Government statistics.
PUBLIC HOUSING LOSSES: Locally, from 2000 to 2010, 6115 Council homes were bought through the Right To Buy scheme and removed from the public housing availability. In the same decade approx 1000 households per year joined the Southwark Housing Waiting list, the total number on the list reaching a current high point of almost 11,000. It’s worth pointing out that the figure of 11,000 households does not mean 11,000 people are waiting but means that 11,000 people and in many cases their family and dependents are also waiting for homes. See this article here for the figure of close to 20,000 people on the waiting list: ‘More than 19,000 applicants are on the current list, which has risen by more than 2,000 in 12 months…Southwark is the biggest local authority landlord in London but still has a desperate shortage of homes to let…The rise in the number of people on the list is thought to be due in part to the high cost of homes in the capital and increased rents in the private sector‘.
NEW BUILDS and WEALTH: In the same period 5470 ‘affordable’ homes were built across the Borough although this has not in anyway impacted on or diminished the massive Council waiting list suggesting that ‘affordable’ housing is not an option for most on the list. In the same period again house price to income ratio has nearly doubled in the Borough and the average selling price of a home in Southwark has quadrupled. Again from 2000 to 2010 average incomes on Southwark have rocketed as a result of the new middle class residentials in the area. It’s not that poor people are earning any more money that makes the statistics high, its that the new wealthy people in the area skew the stats upwards.
One final addition worth adding is that the figure for empty homes in Southwark now stands at 3367 dwellings.
PUBLIC HOUSING AGAIN
We will make the same point again as we have done so many times before on this website – that the term public housing has been subject to spin and demonisation as it presents too close a real picture to what it really is – Housing for all. Instead the term ‘Council Housing’ or ‘Social Housing’ has been used politically to replace the good term ‘Public Housing’. This change has been used to portray council tenancies and council tenants as the bottom of the housing pile. It’s been used as a stigma to undermine the value and sense of public housing for all with council estates being made to see like criminal wastelands that everybody can’t wait to escape from.
Some of us were living on an estate in Walworth Estate in the early 1990’s and we were cheek by jowl with council tenants who ranged from cleaners, doctors, musicians, bank clerks, electricians, therapists, delivery drivers, yoga teachers, unemployed people, gardeners, post men and women and so on. It was only as a result of attacks on the idea of public housing with the introduction of the Right To Buy that this was slowly eroded. Spurred on by the super discount available for long term tenants many people bought their own house and then either sold up at super profit (some of our neighbours bought for £23,000, sold for £169,000 and moved out to a new place) or people got second mortgages on the old place and then bought a new place, leaving the old place as a nice money earning Buy-To-Let (£150 per week!! or more). The old mixed community was then shattered as the Estate became and more about private housing – the TRA was taken over by middle class people whose main concern was their house prices, hence their main concerns were with rubbish, noise, crime, teenagers and getting the Council to enforce penalties on offenders. They weren’t at all interested in the stories or reasons why rubbish, noise, crime or teenagers might be issues or problems or even in how a local community might act to deal with these things themselves.
We have two stories that are becoming a bit like our party stories (you can see how fun we are at parties!) that seem to sum up the changes on this estate which by this time had become over 50% private flats. Our first anecdote concerns the last time we felt like we could attend and stomach a Tenants and Residents Association meeting. It was during the Heygate Estate decant and some new build ‘affordable’ housing was being built near the Estate. At the meeting one of the new private housing TRA people asked with some fear and loathing ‘If people form the Heygate would be offered some of the new HA flats across the road’. Aside from the disgusting ignorance, it is as if it had never struck them that they themselves were living on a council estate despite the fact that they had a leasehold property within it. It was and still is a Council Estate. Our other experience from the same TRA meeting was the hysteria around people putting rubbish out on the wrong days. Things like chairs, tables, lamps, rugs, TV’s and bags of rubbish were appearing on the estate but not on collection days. As long term tenants we knew that this had always been the case and also as folks who enjoyed taking or giving the old piece to the street on the wrong day, we knew that some people’s rubbish is another person’s free table and chairs or free collection of music magazines or free dvd player. We call this a Rubbish Economy although it’s different and better that the more general rubbish economy of the UK (Boom Boom)! Any how, our point is, some things more wealthy people just can’t understand. For them it’s all about the sanctity and value of their house, their investment, their asset, or their other rentable property.
Even though Southwark Notes is highly critical of Southwark Council and it’s dubious role in the disastrous regeneration and gentrification of the local area, we are still proud to be council tenants and know that on the incomes we earn we could never afford a good a place as our council flats. Not only that, we enjoy living on our estate as many people there seem more concerned with estate life as it is, how it works and how people live together and what can be done together. This is not to say that all housing should be public housing but to say that many more options exist to house people than overpriced and badly built new builds. We just seem to have entered an age where people have forgotten why decent homes for all is a worthwhile and common sense approach to housing.
So you could say that there is a certain obscenity to building a one bedroom flat in The Elephant and selling it for £299,000 when the area itself is one of the most deprived in London. That’s £540+ per sq foot for your one bedroom flat! It’s certain not taking seriously the underlying problems of the area. There is no real believable argument that increasing the tax base of the local area will advantage local people in the dim distant end as we know that trickle down economics do not shower the poor with cash and opportunity (especially when they have already been chucked out of the area).
Our favourite line from the Oakmayne Tribeca Square brochure is this one that underlines what we said above: ‘With its high population density forecast to increase, London benefits from demand outstripping housing supply’. Basically you can translate this as loads of people need housing but there isn’t enough so if you own some 1, 2 ,3 or penthouse flats you can charge a fortune. Benefits for the lucky few. What price housing? What price homelessness? The madness continues…
Appendix: Oakmayne developments in Southwark so far:
1993 Leathermarket Court, SE1 (91 housing units)
1997: 32-34 Borough High St, SE1 (10 housing units)
1998: Horseshoe Wharf, Bankside SE1 (?)
2002: Telephone Exchange, Liverpool Grove, SE17 (14 housing units)
2002: Winchester Wharf, Bankside (?)
2003: Victor Wharf, Borough
2004: Tennis Court, Bankside (12 housing units, one office)
2004: Winchester Stables , Bankside (7 housing units, one office)
2005: Disney Place, Borough (14 housing units, 3 offices)
2005: Wireworks, Borough (?)
2005: South Central East Walworth, (93 housing units 7 commercial)
2007: O-Central Walworth 2007 (188 housing units, 14 commercial)
Southwark Notes - whose regeneration? 