Last week I raised the issue of London's housing crisis in prime minister's Question Time. Specifically I challenged prime minster Cameron on the activities of his colleague, the multi-millionaire Tory MP, Richard Benyon. His family company has acquired a minority interest in the New Era Estate in Hackney. The new owners are now intent on refurbishing the flats and driving up rents. Tenants are frightened they will soon be evicted if they cannot pay. The Benyon family insist they have no plans to evict anyone. But as Richard Benyon's brother Edward put it at a recent meeting with worried tenants "We've never evicted anybody, because when people have not been able to afford the rent they've moved out."
The Daily Mirror has interviewed a number of New Era tenants. One said "It has been terrifying, horrific. We are completely devastated. I haven't been able to sleep with the thought of being homeless. My dad's disabled and I don't know where we are all going to end up." Another, who had lived on the estate for 70 years, said "It is terrible. I got a letter two weeks ago. I don't know what's going to happen next." Another family said "We've been told we have to be evicted by a bailiff, together with our children, before the council will help us."
Richard Benyon approached me about the issue after I had raised it in parliament. He clearly wasn't happy. But the Benyon family and their tenants see the issue from diametrically opposed viewpoints. For Benyon these are investments. For the tenants these flats are their homes
The Benyon family have been big landowners in Hackney since 1822. Across the road from where I live in Hackney is Englefield road. It is named after Richard Benyon's stately home Englefield House, part of a 20,000 acre estate worth £125million. This may be why his family thinks raising rents on the New Era estate, to match spiralling market prices, in Hackney is just a simple business decision. It must be difficult for someone who lives on a £125million estate to understand how frightening the prospect of big rent rises are.
But the problems on the New Era Estate in Hackney go to the heart of the London's housing crisis Housing in London is currently driven by turbo-charged market conditions. This is not just to the exclusion of housing need, it also to the exclusion of maintaining stable communities. Increasingly even middle management workers in the public sector cannot afford to buy in London. This will mean acute problems in recruitment and retention in the near future.
The international super wealthy are buying up property in areas like South Kensington, often leaving them empty most of the year. This drives up prices, in a ripple effect around the capital, and pushes London's middle classes out to areas like Hackney and beyond. Building more houses alone will not solve this problem, because there is an almost infinite supply of global plutocrats willing to buy up property in Central London. Market based solutions cannot work properly in London, because the market is broken. And the spiralling market in private property is reflected in rents.
The estate agents, who marketed New Era Estate originally, explained that it produced "Gross current income of £754,098 per annum with the opportunity to substantially increase rents through asset management" "Asset management" is obviously a euphemism for driving out existing tenants. The tenants are right to be terrified.
London needs a whole package of measures to deal with its housing crisis. These should include: cracking down on exploitative lettings agents; action to stabilise rents; a mansion tax with safeguards; a redefinition of "affordable" rents so they bear some relationship to average salaries and allowing London councils to borrow to build.
Ordinary London families are being treated like counters on a Monopoly board by multi-millionaires like Richard Benyon MP and his family company, for whom housing in London is merely a business opportunity. Labour knows that housing is also about stable families and communities and we will shape our policies accordingly.