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Future UK slums
westernpromise
Posts: 4,833 Forumite
Most people who give the matter any thought would, I think, agree it is unlikely that our generation has stopped building slums. We tend to picture slums as overcrowded Victorian tenements, but comparatively recent developments like this one from 1974 are clearly constructive latter-day slums.
https://en.wikipedia.org/wiki/Heygate_Estate
It follows that there must be very probably be new and future slums emerging and / or under construction today. Given this, how do the slums of the past and the future differ?
First, perhaps I should be clear about what I mean by a slum. Interestingly, there is a UN definition of a slum, as
"...a group of individuals living under the same roof in an urban area who lack one or more of the following:
1. Durable housing of a permanent nature that protects against extreme climate conditions.
2. Sufficient living space which means not more than three people sharing the same room.
3. Easy access to safe water in sufficient amounts at an affordable price.
4. Access to adequate sanitation in the form of a private or public toilet shared by a reasonable number of people.
5. Security of tenure that prevents forced evictions."
http://mirror.unhabitat.org/documents/media_centre/sowcr2006/SOWCR%205.pdf
The latter qualification would mean that people in the UK renting from cowboy landlords given to revenge evictions could be considered slum-dwellers. Probably one should not make too much of this; they still have rights, and in other documents it is clear that the UN is talking about forced eviction by parties who do not in fact own the dwelling at all. Elsewhere the UN uses other definitions, too. For those interested, https://unhabitat.org/wp-content/uploads/2003/07/GRHS_2003_Chapter_01_Revised_2010.pdf is an informative read. From that link I have taken the following definition
...the traditional meaning – that is, housing areas that were once respectable or even desirable, but which have since deteriorated as the original dwellers have moved to new and better areas of the cities. The condition of the old houses has then declined, and the units have been progressively subdivided and rented out to lower-income groups.
as most appropriate.
Typical new suburban builds these days are estates of identical and very small houses and flats. If urban, they tend to be landmark towers or conversions; London these days is full of these. Of these, the latter strike me as prime candidates to become future slums.
I say this because the typical Nine Elms type development is, nowadays, sold to overseas investors who have no intention of occupying them. They buy off-plan and keep them as a store of value. If the perceived value should appear doubtful these kind of properties could quickly become undesirable to buy, with the result that nobody will. Their prices falling won't be enough to shift them - if prices are falling transaction volumes fall because the would-be buyers cannot themselves sell in order to buy.
When last we were in this place, in 1989 / 1990, what then followed with urban developments was that they ground to a halt either unfinished or, if small to medium, finished but largely unsold. The developer then went bust and the receiver took over. Where these developments were in the form of blocks of flats, there was usually an ongoing contractual obligation upon the receiver to maintain the buildings. Contractually the cost of doing this could not be dumped onto the owners of the flats already sold. They could be charged only whatever percentage of the maintenance spend their leases said they could be charged.
So the receiver had the bankrupt developer's ongoing obligations to meet, but insufficient money to do so. How they solved this was they filled the other properties up with social tenants. Hence you had places like Elnathan Mews in London W9, maybe 15% of which had been sold to private occupants before the bankruptcy, which were then 85% occupied by social tenants.
In 1990 the scales both of overdevelopment and of housing demand alike were much less. Today they are both excessive, so it seems quite likely to me that we'll see a few developers go bust and large portions of their unsold developments let to social tenants. This will mean that the private investors who don't live there will see their investment collapsing in value, and will then sell up to landlords at reduced prices, reflective of the yield based on what social tenants can rent for, and of the acute regulatory risks that go with being a landlord. Probably the receiver will then sell the rest of the development to such landlords too.
At this point you have all the ingredients for a descent into slum status. The new owners have paid flumpence for the properties and make out like gangbusters as rents creep up. Meanwhile as the market recovers, which cyclically it always does, the value of the site rises. Eventually the landlords receive an offer they can't refuse, evict everyone and sell the site to a developer, who demolishes and builds new. The cycle then repeats.
It strikes me as exceedingly risky to buy into any of these new developments if you actually intend to live there. You have no way to be sure that the developer won't go bust, or that far from being an enclave of professionals, your new flat will instead find itself amid "the poorest quality housing ...a refuge for marginal activities including crime, ‘vice’ and drug abuse". You could be buying a future favela.
I'd be interested in others' views of what might end up as slums, and what the pathway to that might look like.
https://en.wikipedia.org/wiki/Heygate_Estate
It follows that there must be very probably be new and future slums emerging and / or under construction today. Given this, how do the slums of the past and the future differ?
First, perhaps I should be clear about what I mean by a slum. Interestingly, there is a UN definition of a slum, as
"...a group of individuals living under the same roof in an urban area who lack one or more of the following:
1. Durable housing of a permanent nature that protects against extreme climate conditions.
2. Sufficient living space which means not more than three people sharing the same room.
3. Easy access to safe water in sufficient amounts at an affordable price.
4. Access to adequate sanitation in the form of a private or public toilet shared by a reasonable number of people.
5. Security of tenure that prevents forced evictions."
http://mirror.unhabitat.org/documents/media_centre/sowcr2006/SOWCR%205.pdf
The latter qualification would mean that people in the UK renting from cowboy landlords given to revenge evictions could be considered slum-dwellers. Probably one should not make too much of this; they still have rights, and in other documents it is clear that the UN is talking about forced eviction by parties who do not in fact own the dwelling at all. Elsewhere the UN uses other definitions, too. For those interested, https://unhabitat.org/wp-content/uploads/2003/07/GRHS_2003_Chapter_01_Revised_2010.pdf is an informative read. From that link I have taken the following definition
...the traditional meaning – that is, housing areas that were once respectable or even desirable, but which have since deteriorated as the original dwellers have moved to new and better areas of the cities. The condition of the old houses has then declined, and the units have been progressively subdivided and rented out to lower-income groups.
as most appropriate.
Typical new suburban builds these days are estates of identical and very small houses and flats. If urban, they tend to be landmark towers or conversions; London these days is full of these. Of these, the latter strike me as prime candidates to become future slums.
I say this because the typical Nine Elms type development is, nowadays, sold to overseas investors who have no intention of occupying them. They buy off-plan and keep them as a store of value. If the perceived value should appear doubtful these kind of properties could quickly become undesirable to buy, with the result that nobody will. Their prices falling won't be enough to shift them - if prices are falling transaction volumes fall because the would-be buyers cannot themselves sell in order to buy.
When last we were in this place, in 1989 / 1990, what then followed with urban developments was that they ground to a halt either unfinished or, if small to medium, finished but largely unsold. The developer then went bust and the receiver took over. Where these developments were in the form of blocks of flats, there was usually an ongoing contractual obligation upon the receiver to maintain the buildings. Contractually the cost of doing this could not be dumped onto the owners of the flats already sold. They could be charged only whatever percentage of the maintenance spend their leases said they could be charged.
So the receiver had the bankrupt developer's ongoing obligations to meet, but insufficient money to do so. How they solved this was they filled the other properties up with social tenants. Hence you had places like Elnathan Mews in London W9, maybe 15% of which had been sold to private occupants before the bankruptcy, which were then 85% occupied by social tenants.
In 1990 the scales both of overdevelopment and of housing demand alike were much less. Today they are both excessive, so it seems quite likely to me that we'll see a few developers go bust and large portions of their unsold developments let to social tenants. This will mean that the private investors who don't live there will see their investment collapsing in value, and will then sell up to landlords at reduced prices, reflective of the yield based on what social tenants can rent for, and of the acute regulatory risks that go with being a landlord. Probably the receiver will then sell the rest of the development to such landlords too.
At this point you have all the ingredients for a descent into slum status. The new owners have paid flumpence for the properties and make out like gangbusters as rents creep up. Meanwhile as the market recovers, which cyclically it always does, the value of the site rises. Eventually the landlords receive an offer they can't refuse, evict everyone and sell the site to a developer, who demolishes and builds new. The cycle then repeats.
It strikes me as exceedingly risky to buy into any of these new developments if you actually intend to live there. You have no way to be sure that the developer won't go bust, or that far from being an enclave of professionals, your new flat will instead find itself amid "the poorest quality housing ...a refuge for marginal activities including crime, ‘vice’ and drug abuse". You could be buying a future favela.
I'd be interested in others' views of what might end up as slums, and what the pathway to that might look like.
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Comments
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when i was living in kilburn, i thought it was a good invesment. after living there for a few years i came to realise how much of a "slum" it is. It may not fit the actual definition of a slum but it came pretty close to one for the following reasons:
- high number of BTL properties
- high turnover of people living there (due to BTL as well as people selling soon after buying)
- mostly working class and benefits people
- large number of bettings shops, kebab shops, fast food chain, pay day loan shops etc
- grotty feel of area
- there was a half way house near my property and beggers too on the high road
the area may improve over the years but i am wasnt willing to hang around till im 40/50 for that!
boy am i glad i sold up!0 -
- mostly working class and benefits people
boy am i glad i sold up!
That's alienated a large number of MSE members. Even 'middle class' people work! ( The Two Ronnies sketch comes to mind.)
However, because of the way households are categorised by the work status of the main earner, I've been dragged down to working class, as I was middle class (a teacher) but my husband (still employed) is a manual worker.
There are also 'upper middle class' people on benefits; example a formerly well off man and wife, featured in the Mail, because they couldn't keep up their lifestyle on benefits, with four children, school fees, ballet classes etc to pay for.0 -
That's alienated a large number of MSE members. Even 'middle class' people work! ( The Two Ronnies sketch comes to mind.)
However, because of the way households are categorised by the work status of the main earner, I've been dragged down to working class, as I was middle class (a teacher) but my husband (still employed) is a manual worker.
There are also 'upper middle class' people on benefits; example a formerly well off man and wife, featured in the Mail, because they couldn't keep up their lifestyle on benefits, with four children, school fees, ballet classes etc to pay for.
hahaha maybe i did generalise a bit! dont we all?
i guess i should have been more specific - basically people who are poor. i prefer middle class areas. may sound harsh but its the truth and im sure others are the same as me!0 -
I wouldn't automatically characterise an area that had a lot of BTLs or working class people in it as a slum, personally.0
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westernpromise wrote: »I wouldn't automatically characterise an area that had a lot of BTLs or working class people in it as a slum, personally.
i wouldnt as well. but there were other things too which i mentioned in my post. having a street party on my road in the middle of the night in what is supposed to be a residential area is not exacctly my cup of tea.0 -
I've been going through a bit of rationalisation of late, selling potential slummers and ploughing the proceeds into far nicer property, and yes in spite of triggering a CGT event shared between a couple, in the round it makes sense.
I will shortly have 1 potential slummer left, a high rise concrete jobby - I look-out for how the tenant profiles in the blocks are shifting and also ponder long term large costs if these blocks need total exterior refurbs
I don't regret buying these lower end units as they've but on some tasty capital appreciation and been nicely profitable rent wise.
I don't want to be 'slumming it' creeping round these locations when I'm retired.0 -
in a bad market its the slummers that perform badly in terms of price.0
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The closest thing to a slum in London is probably the kingsmede estate in Hackney. It is or was the largest social housing estate in the whole of Europe. This is well worth watching imo
https://www.youtube.com/watch?v=fPm2Ia_Y_zk0 -
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arent these areas supposed to be gentrifying hence the price rises?0
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