Croydon is reckoned to already have around 1,000 flats in converted office blocks, thanks to Tory relaxation of planning rules. Now residents in one block are facing the nightmare of service charges doubling to pay for safety works. By BARRATT HOLMES, housing correspondent
The essence of what has become known as “landlordism” and, for that matter, “developerism”, was blatant in yesterday’s housing announcement by Rishi “Four Homes” Sunak and the Tory Government.
Steepling service charges: leaseholders recently got bills for at least £600 per month, towards the cost of fire safety and roofing work
They want to strip planning powers away from local authorities and the Mayor of London, to put an end to all those irritating things such as building standards and affordable housing quotas that have been holding back property businesses from making even bigger profits than at present.
It is all neatly encapsulated in a salutary little tale of one of Croydon’s many PDs – permitted developments: Green Dragon House, on Croydon High Street.
PDs are cheap to do and generate decent profits – which is why dodgy developers like them so much. “The slums of the future” was how these office-to-flats conversions, carried out with minimal intrusion from local authority planning departments, were described by one of Sadiq Khan’s previous deputy mayors for housing.
As a parting gesture before they (probably) lose the General Election, the Tories are trying to railroad through the removal of even more controls on this kind of conversion schemes.
Until 10 years ago, when the Tories still controlled Croydon Town Hall and Jason Perry (who he?) was the cabinet member for development, the borough was among the national leaders for office-to-resi conversions: Bish-bash-bosh! Loadsamoney!
Homes, sweet homes: Concord House, an office block converted into flats under PD rules, and now leased by Croydon Council
Some of the converted blocks were later bought up by the council to be used as emergency, temporary accommodation, where the inadequacies of the conversions, the under-sized rooms, lack of windows and lack of safety measures, such as fire escapes, began to emerge as soon as people began to live in them. The so-called “slums of the future” have already become the council-run slums of today.
But other converted office blocks, such as Green Dragon House, were sold on the private market, where the “new” homes were snapped up either by eager buyers or by investor landlords.
That first blast of enthusiasm for the Green Dragon flats has long since extinguished, with tenants living in even the smallest of micro-flats this month discovering that they face an annual service charge demand of more than £7,000.
High on cocaine, the ‘arrogant’ developer crashed his Porsche and his business
Demand for office space, especially in the blocks in and around Croydon, was already in decline 15 years before anyone had heard of “covid” and “working from home”.
Green Dragon House was built in the Croydon boom years of the 1960s, so by the 2010s its jaded office space was overdue some kind of makeover when it was acquired by a property company called Inspired. This was at a time of “peak Westfield”, when the regeneration of Croydon town centre was driving up property prices for those keen to ride the coattails of the promised £1.4billion scheme.
Inspired saw Green Dragon House, perched above a branch of Gregg’s, as capable of providing 119 flats – so sorry, “luxury executive apartments“. In 2015, once the conversion work was completed, a two-bed flat in the block was put on the market for £350,000. Rents of £1,000 per month, even for the cosiest of small flatlets, were not uncommon.
16 floors or PD-enhanced profits: Impact House was one of a handful of office-to-resi conversions taken on by Inspired
As well as Green Dragon House, Inspired worked on transforming four other Croydon office blocks, including 16-storey Impact House, overlooking the Croydon Flyover, into hundreds more, rabbit-hutch-style little living spaces. A three-bed flat on the top floor of Central Cross, more former offices on South End, went for sale at £600,000.
Inspired had always been slightly controversial, a bit “edgy”. Well, at least its CEO, Martin Skinner, liked to think so, as he plastered the windows of Green Dragon House with “Vote Barwell” Tory posters ahead of the 2015 General Election.
They had reason to be grateful.
The Tory Government removed many of the requirements of the planning process for these kinds of permitted development schemes. Inspired was even able to strip out one of the two fire escape stairways from Green Dragon House, in order to squeeze in extra, profit-spinning flats.
“Grenfell Tower went through planning and was not safe,” Inspired’s Skinner said after Inside Croydon had reported the impact of his office conversion. “Ours went through permitted development rules and are safe.”
In the days after the Grenfell Tower disaster, Skinner’s statement said all you needed to know about the relationship between the Tory Government and greedy developers.
But in 2019, Inspired crashed – quite literally – after Skinner smashed his (what else?) Porsche into a tree while high on cocaine, leaving his young woman passenger with life-changing injuries. Skinner was jailed for 22 months, with the judge’s description of him as “arrogant” ringing in his ears as he, and in effect his company, was taken down.
Skinner had claimed that the property empire he had built was worth £500million, but now he was declared bankrupt. After being released from jail, Skinner died two years later, while with his Russian girlfriend on a business trip to Dubai, apparently from a heart attack. He was 42.
According to House of Commons records, Croydon is reckoned to have 3,666 flats that have been converted from former office blocks, the most of any local authority in the country. More than 1,000 of these PD flats are in Croydon town centre.
Few of those have been subjected to close scrutiny by the local authority’s planning department because of the permitted development rules introduced under the former Communities Secretary, Eric Pickles. In 2015, the then-newly elected Labour council put a halt on any more PDs in Croydon town centre.
What is happening in Green Dragon House today could be the plight tomorrow for owners, tenants or leaseholders in any properties created in the next rush of PD flats under the proposals announced yesterday by Sunak and his housing minister, Michael Gove.
High rise charges: a typical one-bed flat in Green Dragon House now has to pay nearly £600 per month in service charges, on top of their mortgage
Green Dragon House’s current managing agents, Rendall and Rittner, have shocked residents in the block with a massive hike in service charges.
According to one source, Green Dragon House leaseholders “already paid some of the highest service charges in Croydon in comparison to other blocks with similar facilities.
“The latest demand doubles it.”
That sees investor landlords and leaseholders for the smallest of micro-flats in the block looking at paying nearly £600 per month for their “services”.
“For many leaseholders, the new service charge now exceeds the costs of their mortgage payments, and is unaffordable,” according to our source.
Much of the charge consists of an up-front contingency payment to cover the cost of planned roof work, despite the block’s owner Ishguard Ltd/E&M Ltd already trying to claim for it on their insurance. Roof work needed, less than 10 years after Inspired’s conversion work was completed…
Other up-front charges arise from the estimated costs of implementing new building safety requirements introduced as a result of the tragic blaze at Grenfell Tower.
Soaring service charges: residents in Green Dragon House are picking up the bills for fire safety and other works
Leaseholders are being billed for future “fire risk appraisals” of the external walls and other items when the owners have already been allocated £379,521 of pre-tender support from the government’s Building Safety Fund to pay for surveys and other technical reports.
And despite repeated requests, a contested charge of up to £50,000 for cladding remediation work imposed as part of last year’s service charge demand has still not been removed from leaseholders’ statements, even though they are not liable for the costs of remediation work under legal “Qualifying Leaseholder Protections”.
What was it that multi-millionaire developer Martin Skinner said in around 2017 about Green Dragon House? “Ours went through permitted development rules and are safe.”
Green Dragon House leaseholders are making formal complaints to the freeholder via the management companies, consulting the Property Ombudsman, and appealing to MP Sarah Jones.
Ah. The irony. In 2015, when developer Skinner plastered “Vote Tory” posters all over Green Dragon House, Conservative Gavin Barwell clung on to his Croydon Central seat by 165 votes. His Labour rival that day was Sarah Jones. Barwell went on to become one of the housing ministers to ignore various warnings about fire risks to residential tower blocks such as Grenfell, while Jones had to wait two years until she finally entered Parliament.
Whatever Sunak, Gove and the Tories’ announcement was about yesterday, it wasn’t about providing more, better and affordable housing.
*Updated 15Feb2024 to amend the total number of PD flats in the whole of Croydon
A D V E R T I S E M E N T
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
As featured on Google News Showcase
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
Inside Croydon is a member of the Independent Community News Network
- Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
ROTTEN BOROUGH AWARDS: In January 2024, Croydon was named among the country’s rottenest boroughs for a SEVENTH successive year in the annual round-up of civic cock-ups in Private Eye magazine
Croydon should insist that all future development is on a collective enfranchisement basis so that the owners themselves are responsible for maintenance. True it’ll take a bit of work and organising but it will prevent scum landlords ripping off occupants. Obviously waiting for Michael Gove to sort out leasehold is a bit pointless…
You’ll be calling for the end of Right To Buy next and the delivery of council homes at genuine social rent!
If only…
Only in the freeholder / leaseholder world do so many roofs supposedly need substantial “work” doing so often. The service charges sound outrageous. Good luck to the leaseholders in challenging these service charges, it must be very stressful for them.
Baron Barwell during his brief time as Housing Minister called for more people to use the Bank of Mum and Dad to finance their housing costs and made policy that led to decline in space standards and other planning restrictions on developments to stimulate increased home building and formation.
For the people who live in such developments as Green Dragon House we can see the short sightedness of such policy. All that matters is the short term political noise and no consideration of the long term problems that occur as a consequence of not making a realistic appraisal of favouring developers interests over those of consumers.
How can the residents in this Block realistically plan ahead unless they are of such wealth that they can afford to move out anyway.
By the way Barwell is now a Housing Consultant advising on Developments.