Compulsory Purchase Orders

Eleanor Penny

Kensington and Chelsea Council has said it will rehouse 68 families from Grenfell Tower in luxury Kensington Row apartments, where prices start at £1.7 million. But the housing crisis that led to the fire – the overlapping effects of underdevelopment, neglect, cuts and sell-offs of social housing stock – has left many other people in the borough homeless, or in unaffordable or substandard accommodation. Thousands languish on waiting lists for the ‘very few social housing properties available’. Meanwhile, 1399 privately owned homes in the borough lie empty. Senior Labour Party politicians have suggested that the council should use compulsory purchase orders to ‘requisition’ empty investment properties. The idea was met with outrage from people scandalised by the thought of a government ‘land grab’: ‘The state shouldn't seize private property backed by the implicit threat of violence,’ GQ’s political correspondent, Rupert Myers, tweeted. But councils have been using compulsory purchase orders for years.

Myers et al. didn’t protest when Newham Council used them in the run-up to the Olympics, to evict residents of sites now home to luxury apartments and underused sports facilities. The measly compensation meant that many former residents – such as those of the Carpenters Estate – were forced not only out of their homes but out of London altogether. The new housing built on the site has some provision for ‘affordable housing’. But ‘affordable’ is defined as ‘no more than 80 per cent of market value’, and over the Olympic regeneration period, from 2005-13, house prices in the surrounding areas went up by 45 per cent. Wages, needless to say, didn’t.

Southwark Council forced residents of the Heygate Estate to sell their houses for 40 per cent of the market value. The homeowners took the council to court but the CPOs were upheld and they were forcibly turned out of the homes where some of them had lived for more than thirty years. The estate was sold to the developer Lendlease for £50 million; the evictions had cost the council £44 million. When the new development opened for business in November 2016, Lendlease touted the flats (starting price £550,000) as an investment opportunity – and they were duly snapped up. Heygate residents, meanwhile, have been scattered to the four winds. Southwark and Newham are both Labour-controlled councils.

Untroubled by the lessons of Grenfell, or indeed the policy positions of their colleagues in the shadow cabinet, Haringey Council is pushing through a development scheme that threatens up to 1900 homes with privatisation or demolition. Strapped for cash and unable to borrow more than £50 million, they've found a workaround: the Haringey Development Vehicle, a 50-50 partnership with Lendlease worth £2 billion. ‘Underused’ property in the area will be reclaimed or bought up using CPOs, and then ‘developed’ by the private company in consultation with the council. The council has estimated that around 40 per cent of the homes will be 'affordable'; that is to say, pegged to the house prices sure to be pushed up by the land value speculation that such projects reliably attract. Local residents fear that these rising prices, combined with forced evictions and the destruction of council houses, will lead to further homelessness. The HDV provides little hope for the eight thousand Haringey families currently on the waiting list for a council house. In the meantime, the indoor market at Seven Sisters, the heart of one of the UK’s biggest Latin American communities, faces being regenerated into oblivion.


  • 24 July 2017 at 9:35pm
    LTK says:
    The reason why CPOs would be an appalling idea here is the incredible cost. Why pay £1m to house a single small family when you can build homes sheltering a dozen fanilies for that amount of cash anywhere else? I'm sure it's lovely living in K&C - people wouldn't pay so much for houses there if it wasn't - but until we reach the post-scarcity utopia we'll need to decide how best to use what we have and buying houses in K&C is never going to be a sensible response to our lack of affordable housing.

    • 26 July 2017 at 1:03pm
      andrewhorton says: @ LTK
      I am tempted to question your logic. If the house is worth £1m, then it is not really a purchase is it? It is merely moving money from the bank to the asset. Later, should you need the cash back, you sell the house. In the meantime, it will probably appreciate in value. Given a council can borrow around 2%, the £1m house will only cost £20k per year, which is less than the cost of the bed and breakfast that otherwise be paid for.

      Buying the house would be good value, and a safe investment. Go ahead I say.

  • 31 August 2017 at 2:13pm
    Tony 447 says:
    The reason why it would be a “poor investment” for any public sector body to purchase housing is that a future or present Thatcherite government would force them to sell a house they acquired for £1m, for half of that. Such privatisation would not only further denude the public sector of assets, it would also secure electoral victory for the Conservatives, for voters are not mindful of the misery such policies eventually create. That’s why the Labour government in the 2000s chose health and education as priorities, little realising that in those sectors as well the privatisation gravy train was closer at hand than ever they thought. With that threat, and if we are stupid enough to retain a policy on the “public sector borrowing requirement” which treats asset acquisition as spendthrift idiocy, the needs of those in housing need will never be addressed as effectively as once happened in the late 1940s.