It looks like a straightforward deal. The Holloway Prison site, just a mile from London’s west end in the north London Borough of Islington, has just been sold off after standing empty since 2016. The Ministry of Justice (MoJ) sold the land to the Peabody Housing Association for just over £80m. Labour leader and constituency MP Jeremy Corbyn immediately tweeted: ‘For too long private developers had free rein to buy up public land and build properties that are completely unaffordable for the local community. But under a Labour Mayor and Labour council, the former Holloway Prison site will include 600 social and genuinely affordable homes.’
What’s the real deal?
To clinch its purchase of the site Peabody has promised to build 1,000 new homes. For this it obtained a £42m loan from the Mayor’s Land Fund on condition that 60% of the new build is ‘genuinely’ affordable. Details released so far of the 1,000 new homes is that 400 will be for sale at Islington average market price (£800,000) with 420 for social rent, and 180 offered at London Living Rent price-adjusted to middle group earners for rent for three years after which there is an option to buy.
It’s the money trick again
The Department for Communities and Local Government estimate puts the residential land value per hectare in Islington at £52m. This means that the land value of the 10-acre (roughly 4 hectares) site is £210,526,310. So why has the MoJ sold the site to Peabody for just £81.5m? This is where the money trick comes in. One source estimates the final ‘built-out’ scheme at £500m; local estate agent Carrell says the final worth of the completed project could be as much as £2.5bn. Even the lower estimate means that each home will yield £500,000 for investors, while each built home will cost the developers £55,000.
Who is going to make money from the project?
Estate agent consultants Belfinger GVA were appointed negotiators between the MoJ, Islington council and the London Assembly. This thoroughly nasty multinational company has a long record of privatising public housing. In Manchester, GVA installed ‘homelessness’ spikes outside buildings to prevent people sleeping there. Other business interests in the project are land and development consultants Avison Young and housing developers London Square in a joint venture with A2Dominion which manages more than 37,000 homes across London and the southeast. A2Dominion has just secured a £150m funding stream though three loans from Japanese bank MUFG, French bank BNP Paribas and HSBC, adding to its £1.9bn portfolio. Architects Allford Hall Monaghan Morris are also due to make a sizeable profit from the scheme. These are the companies we know about. But with over £100bn of UK property secretly owned, who knows where ownership of the new homes may end up?
What’s in it for the Ministry of Justice?
Owning residential land with the right to build in the middle of London is equivalent to having a very large bank account. But the time comes when it is necessary to capitalise on the money. The Ministry of Justice wants to build nine new prisons on cheaper land outside the city centre. In 2015 the then Justice Secretary Michael Gove announced the planned closure of inner-city prisons including Brixton, Pentonville and Wormwood Scrubs. These huge Victorian-era prisons are crumbling away, overcrowded and insanitary embarrassments to the government. The Victorian Holloway Prison, built in 1852, was renovated in 1971 to become the largest women’s prison in western Europe. It was notorious for its run-down and infested premises. The year it was closed down, 2016, had the highest number of women’s deaths in British prisons. The MoJ wants to get these sub-standard properties off its hands and accepted £80m as seed money towards developing new prisons.
A community plan for Holloway?
In 2017 the Centre for Crime and Justice Studies produced a ‘Community Plan for Holloway’, inviting the public to use a ‘window of opportunity’ to present their ideas for the site. That window has slammed shut but there is a vague promise from Peabody that it ‘will ensure social infrastructure and place-making at the heart of our proposals’.
From the moment the closure of HMP Holloway was announced, North London Revolutionary Communist Group campaigned on the streets and in the community for the future use of the land. We collected thousands of signatures demanding 100% social housing at truly affordable rent plus a social centre in recognition of the incarceration since 1852 of thousands of women on the site. We also learned about the housing hardship of hundreds of local people, many of whom are among the 20,000 people who have been waiting for years on Islington’s housing list. Even if the promised and much needed ‘social rent’ homes emerge on the site, it will barely begin to tackle the housing problem in the borough.
Susan Davidson
Fight Racism! Fight Imperialism! 269 April/May 2019
