Housing: Billionaire owner of 'squalid shoeboxes' must 'up its game'

Since 2004 Camden Council has been housing homeless families in England’s Lane Residence, Hampstead.

But critics say families are “squeezed” into the 165 rooms which have been plagued by rodents, cockroaches, mould and damp.

The owner, Swedish property giant Akelius, purchased the site in 2015 for £42m. It was reported that Camden Council would use it until 2024, then it would likely be converted into luxury housing.

But councillor Meric Apak, cabinet member for better homes, said the council was pulling out early. He said it would save a "considerable sum”, which Camden could invest in “larger rooms and better facilities" at other hostels.

Meric Apak, Camden Council's cabinet member for better homes, said the authority was ending its contract with Akelius three years early so it could invest the savings in better hostel facilities. (Image: Archant)

Who are Akelius?

Akelius operates several houses of multiple occupancy in Camden.

In December 2018, it commissioned a planning consultancy to write a statement supporting a planning application.

The report, by JMS Planning and Development, said Akelius’s £11billion property portfolio included 50,000 apartments in Europe, Canada and the USA, including 115 buildings in London.

Akelius was known for its charity work and was “the world’s largest donor to SOS Children’s Villages," the report said.

“An important part of Akelius’s concept is better living,” wrote JMS. “Akelius upgrades residential units to first class level.”

The UN

But a separate report saw things differently. "Although it does a lot for charity, Akelius’s business model is trampling on the human rights of its tenants,” wrote Leilani Farha, the United Nations’ Special Rapporteur on the right to housing, in April 2020.

In the UK, Canada and Germany, it said: “Akelius’s business model, driven by the desire to maximise profits, has created a hostile environment for its tenants through a severe degradation of housing conditions, higher rents and increased risk or threat of eviction.

“I have been told that Akelius purchases apartment blocks, often with tenants already living in them, and then undertakes renovations to communal areas and vacant apartments within the block, regardless of need. These renovations are a vehicle for Akelius to charge substantially increased rents.”

Akelius said it had been “very surprised” by the report, which was “based on hearsay”.

Julian Obergfell, the company's London head, said the UN had never contacted Akelius before publishing the critical report.

He added: “Many of the properties Akelius acquires require maintenance and modernisation... Without refurbishment, these buildings will eventually become uninhabitable, leading to an even greater shortage of housing.”

'Planning loopholes’

In January 2020, Oliver Cooper said he was worried about “the proliferation of, effectively, slum housing”.

The leader of the council's Conservative Group told a public meeting that “planning loopholes” were being used “to authorise substandard accommodation”.

He was referring to “the four-year rule”, under which an illegally modified building which remains modified for four years without council action is eligible for retrospective legal status.

“We have recently seen a spate of substandard accommodation that falls way, way below the standards that we expect,” Cllr Cooper complained.

Cllr Oliver Cooper has raised concerns in council meetings about companies like Akelius using 'planning loopholes' to gain legal status for otherwise unlawful modifications. (Image: Archant)

Several cases he had in mind, he told the Ham&High, involved Akelius: “In the last few years, they have been securing retrospective permission to use properties for far more flats than they were originally designed for."

Since 2019, Akelius has sought retrospective legal status for four buildings it has acquired.

The council must either prove the modifications are less than four years old, or grant legal status.

While Akelius is not responsible for the modifications, said Cllr Cooper, it is profiting from the “squalid shoeboxes” they create.

“Their track record in Camden is one of taking over what you might historically consider to be slum dwellings, then getting legal approval for them,” he claimed.

Mr Obergfell responded: “It is incorrect that Akelius specifically buys 'slum housing’ which has been created by other property owners... Akelius is a long-term oriented property owner, offering housing of high quality.”

But in one case, Camden Council itself described Akelius’s accommodation as “substandard”.

Wedderburn Road

In 2019, Akelius sought legal status for 24 Wedderburn Road, a house in Belsize Park which had been split into 25 units.

Planning papers said Akelius bought the house already modified.

One former tenant told the council the building was “unhealthy”, “unhygienic” and “uninhabitable”.

A neighbour said the property resembled “a giant rubbish tip which attracted unwanted vermin.”

Several units lacked toilets or sinks. Some were only two metres wide. But under the four-year rule, Camden had to grant legal status, despite acknowledging that the units were not up to “nationally described space standards".

A report said: “Officers appreciate that the existing units are significantly undersized, resulting in substandard accommodation.”

Mr Obergfell said Akelius planned to renovate 24 Wedderburn Road to "offer a significantly better quality and living standard.”

Planning files show the company has asked to make alterations – but the house would continue to be divided into 25 units.

Akelius said it had made improvements to the building, such as the roof and the windows, but that internal conditions were the responsibility of the operator. (Image: Archant)

Future of England’s Lane

"The conditions in England’s Lane have been abhorrent and unacceptable,” said Cllr Cooper.

“The overcrowding was astonishing. The internal conditions were very poor, in terms of the fabric of the walls and the building. Having to live with rodents as your roommates is not acceptable for anyone.

“Where housing is concerned, temporary cannot be a synonym for substandard. Akelius and all other providers need to up their game.”

Mr Obergfell responded: “It is necessary to distinguish between the owner and the operator of the property. Akelius takes care of its responsibility to maintain the building structure in a good shape. Since Akelius acquired the property in 2015, Akelius has installed new windows and repaired the roof, among other things.”

He said problems such as vermin had existed since before Akelius purchased the building and were the responsibility of the operator.

“Any renovations will depend on the wishes of the new operator... Akelius has contacted multiple housing associations during its search for a new tenant,” he said.