Tower Hamlets Council has refused to buy back 3000 social homes from Tower Hamlets Community Homes due to their £90 million worth of debt.
In a Council meeting on Wednesday 27 September, the Mayor rejected Labour’s motion for the Council to buy back housing stock from Tower Hamlets Community Housing (THCH), causing residents to worry about the future of their homes.
The housing association has found itself in financial difficulty with £90 million worth of debt, meaning it must merge with another organisation to protect its 3000 social homes. In June 2023, it was announced that THCH and Poplar HARCA, another housing association in the East End, were considering a merger. If approved, THCH will transfer all of its stock to Poplar HARCA, creating a 13,000-home housing association across East London. THCH and Poplar HARCA boards will announce their final decision this autumn.
Nevertheless, THCH residents have expressed concern about the proposed merger with Poplar HARCA, and many would prefer the Council to take back control of their homes.
In March 2023, the Regulator for Social Housing (RSH) published a worrying picture of THCH management and finances. While THCH was previously rated G1 for governance, after review, the RSH downgraded the social housing association to a G3 grade. THCH’s weak financial position resulted in their viability grade also being downgraded, from V2-V3.
Residents worry that unless the Council buys back the social housing stock, services won’t improve.
Asma Islam, Labour councillor for Weavers, said:
‘Three thousand homes belong to THCH. The residents were told a few months ago that their landlord was downgraded by the regulators. Residents have been struggling under the poor services from the housing association for years.
‘The conditions are just so terrible. They are already fighting for justice about these conditions and services, and now they’re up against the challenge of not knowing what is going to happen to the housing association.
‘Poplar HARCA operates on the opposite side of the borough to the THCH stock. How will they understand our local issues and our needs?’
Some THCH residents have been facing issues such as damp and mould in their property for years. In May 2022, a group of 25 flats from Charles Dickens House in Bethnal Green organised a strike in response to poor housing conditions, and refused to pay their service charges.
As well as delivering poor services, residents have complained that THCH has been overcharging its leaseholders.
Peter Mengerink, 50, is a resident of THCH property Painter House, on the corner of Sidney Street and Commercial Road. In May 2023, a tribunal found that THCH had been overcharging leaseholders in Painter House, with Mengerink estimating he had been overcharged around £6,000. He said:
‘For the amount of money we pay, services are simply non-existent.’
Following the tribunal in May, the THCH has requested to appeal the result on seven grounds. The case will be heard in 2024.
THCH has amounted £90 worth of debt, leaving them in a financially risky situation. According to the THCH website, a combination of building safety investment, inflation, a rent cap, and the cost-of-living crisis has severely impacted finances, meaning a merger is necessary for their survival.
At the Council meeting on Wednesday 27 September 2023, the Council decided not to undertake a feasibility assessment on the financial and practical implications of requesting a return of THCH stock to the Council.
The Council said:
‘Buying back THCH stock could place the Council’s current medium-term financial position at risk due to THCH’s significant amount of debt.’
While registered providers such as Poplar HARCA can apply for bank funding towards the debt, the Council is not eligible to do so.
If Poplar HARCA cannot settle the debt, THCH will have to find a much larger registered provider to merge with. Islam commented:
‘If a larger, national housing association takes over, it will be difficult for THCH residents to find the right contact to report to if something goes wrong.
‘With Tower Hamlets Homes, THCH and Poplar HARCA, we know what door to knock on if we have a complaint. With a national housing association, you don’t know. There are really, really deep concerns for families.’
In response to the concerns of THCH residents about their future homes, the Council said:
‘Should the merger go ahead, under the process THCH residents would retain their terms and conditions, be protected, and be considered equal with Poplar HARCA residents.’
In response to the concerns of THCH residents about the future of their homes, a spokesperson for Poplar HARCA said:
‘There are no regeneration plans for THCH estates. However, our regeneration promise is always to give tenants the choice to stay or return to where they live; and regeneration will only happen if the majority of residents vote for it.’
On 25 October 2023, the Council will host an Ask the Housing Ombudsman event with the Housing Ombudsman for England, Richard Blakeway. The event will advise Tower Hamlets Homes and housing association tenants and leaseholders on how to raise concerns about their landlord’s service.
For more articles like this one, read Bow renters hold protest against rent increases of up to 70%.
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