Property company, The Benyon Estate, have announced they will sell their stake in Hoxton’s New Era estate after substantial rent rises caused fierce protests from residents.
The real estate firm, which is the family company of millionaire Tory MP, Richard Benyon, announced yesterday that they were “reluctantly” withdrawing all involvement from New Era.
Their decision means that Westbrook Partners, a US property investment firm, will now have sole management of the 1930s estate.
Westbrook Partners, who purchased the estate in March, awarded The Benyon Estate management of New Era and a stake of less that 10 per cent in the property.
New Era resident, Lindsey Garrett, and Clapton housing campaigner, Barry Watt, who began a petition to protect their rent rates, called The Benyon Estate’s decision a “massive triumph” for their campaign.
Actor and comedian Russell Brand who joined a protest march to The Benton Estate’s offices on Saturday congratulated the New Era residents and put pressure on the Mayor of London to support the cause.
— Russell Brand (@rustyrockets) November 14, 2014
Garrett and Watt began the campaign after New Era, which has provided affordable accommodation to residents for over 8 decades announced it would be raising its rents to market rates.
New Era’s previous owners, then called First LBS Holdings Limited, maintained affordable rent rates, however as reported in The Mirror, the company’s accounts show that they made £306,865 profit and its shareholders received a £300,000 dividend last year.
When marketed on a commercial property website the New Era estate was described as having “extensive refurbishment/extension and redevelopment opportunities” with “considerable scope for increase in rental income.”
Edward Benyon, The Benyon Estate’s manager and brother of Richard, said: “New Era residents have made it clear that they do not welcome our involvement in the future of the estate. They made it clear that they wanted us to pull out, and this is what we have reluctantly decided to do.”
“With a stake of less that 10 per cent we already had only a limited influence over the decision making and policy. Our withdrawal means that the future direction of the estate will now be wholly a matter for Westbrook Partners.”
Westbrook Partners, who own a global property portfolio, have been protested against earlier this year in New York.
The firm, who co-owns 42 New York buildings aimed at low-income renters in a portfolio known as the “Three Borough Pool”, were forced to carry out thousands of delayed repairs and pay tenants over $1 million in rent credits compensating for illegal fees and over-charges following a campaign by the tenants.
Philip Glanville, Hackney’s cabinet member for housing, said: “Sadly the change in ownership of a small stake of the New Era Estate won’t change anything; the fate of these residents lies in the hands of an American investment company.”
“Treating tenants in this way is completely unacceptable but under current legislation they – and the council – are powerless to stop this.”
“The situation faced by New Era Estate tenants – while even more acute in terms of rising rents and risk of eviction – illustrates perfectly the problems with the private rented sector in London, which affords tenants few rights and leaves them exposed to the worse excesses of the market.”
“We need longer tenancies, index linked rent rises, the end of tenant fees and the end to unscrupulous evictions. Without better regulation, London’s social diversity and economy is at risk.”
The Benyon Estate has confirmed that its contract with Westbrook does not allow it to sell or transfer the share ownership of New Era to a social landlord or housing cooperative.
The Benyon family have owned land in Hackney since 1822. Englefield Road in N1 is named after Richard Benyon’s Reading stately home, Englefield House, whose gardens are open to visitors at a cost of £5.
Dianne Abbott, MP for Hackney North and Stoke Newington said in the Huffington Post: “It must be difficult for someone who lives on a £125million estate to understand how frightening the prospect of big rent rises are.”
“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.”
A new management company will be appointed for New Era in the near future. No details have been given as to how long this process will take.
Westbrooke Partners have not responded to requests for comment.