This blog post first appeared on the Hackney Council blog on 13th March 2015.
For the past three years the Council has been discussing with tenants, leaseholders and freeholders in the second phase of Woodberry Down’s regeneration that they will need to move as part of the regeneration process.
For the past 14 months, residents have known that they must move out of their homes by the end of March.
Stories that have appeared in the Hackney Gazette and other newspapers in recent years about estate regeneration often lack the space to include the detailed background and processes involved.
Some estates are simply uneconomical to refurbish and maintain in the long term, so the only way councils can fully carry out Decent Homes commitments for residents is through demolition and rebuilding.
This is the case at Woodberry Down and other estates in Hackney, aging and inadequately-maintained during years of political and financial crisis in the Council that came to head in the late 1990s. Something had to be done to improve living conditions at Woodberry Down, and at the time the only way to do this was through partnership with a developer and a housing association.
There is no longer any government funding to build new homes for social renting, so the only way to pay for this is by building properties for private sale on the estate. They may seem expensively priced, but money from those sales is helping build new homes for social renting, new shops and creating jobs, and paying for local apprenticeships.
To make way for the new homes to be built, tenants are rehoused on the estate in new homes or, if they prefer, somewhere else. The homes owned by leaseholders, about a third of which live elsewhere and rent out their property to tenants, are bought back by the Council.
We offer leaseholders a brand new home on their estate, which is obviously going to be worth more than their old property, but they can simply transfer what they own of their existing home into the new one, and pay no rent on the rest – this is called shared equity. Shared ownership options are also available, depending on individual financial circumstances.
The law requires market value be paid to leaseholders for their properties, based on sales of similar properties in similar condition in the local area, plus up to 10% of the value of the property in compensation, as well as an additional disturbance payment, such as for legal and moving costs.
The law also states that no one should be paid less, or be paid more, than the market value of their property because there happens to be disruptive regeneration going on, or very expensive new flats being sold as part of it.
The Council acts fairly and reasonably, in accordance with the law, to ensure that leaseholders are offered a fair market value for their home. The Council also has a duty to protect the public purse. Compulsory Purchase Orders, such as the one at Woodberry Down, are only confirmed by the Secretary of State and an independent Planning Inspector when both are completely satisfied that the Council has acted reasonably and fairly.
Sales – not website asking prices – of similar properties in similar condition in the local area are what market valuations are based on. Leaseholders and freeholders are encouraged to appoint their own professional surveyor, which the Council will pay for.
On the other hand, some surveyors use properties that are not on an estate, and that are not in similar condition, or the local area, to base their valuations on, falsely raising the expectations of freeholders and leaseholders, perhaps in a bid to get a higher fee for their work.
If no agreement can be reached between the Council’s and the leaseholder’s surveyors, ultimately the judiciary’s Upper Tribunal (Lands Chamber) decides the value, with no further discussion on the matter.
Many people would like to move into a new house with a garden, but it is regrettable, though understandable, that we have only been able to offer leaseholders and freeholders newly-built and existing flats in Hackney, as houses with gardens are by and large extremely difficult to provide while trying to make the best use of available land to build new high quality homes.
So far at Woodberry Down, more than 400 homes for social renting have been built, with tenants moving into another 109 homes in recent weeks, while 206 homes for shared equity/ownership have been built, and hundreds more for sale which pay for the entire programme. At any given time the developer, Berkeley Homes, employs up to 40 local apprentices on site.
You see how lengthy and detailed this process can be; I hope the above clarifies some matters.