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Peabody mortgaging our homes


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  [Peabody mortgaging our homes] - Posted: 24 May 2016 - 09:55 pm GMT
Nik Wood

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Work up from the bottom. There is something going on involving Peabody taking out mortgages on our homes. Don't know what yet. Will keep you posted. Anybody wants to ask if they've done it on your home I'd be grateful to know what you get by way of an answer.
marynik@btinternet.com

Dear Nik,
Thank you for you response.
I belive my response answers all you questions so have nothing further to add to my email dated 18th April 2016.
Regards


From: Mary Pimm & Nik Wood
Sent: 24 May 2016 15:59

My Association is concerned that you feel that you should only communicate with tenants about matters concerning their homes when you are compelled to. This is compounded when you give priority to communicating with other freeholders. Surely it is a matter of common courtesy if not of sound estate management to tell people who pay you rent that you are using their homes as collateral for loans.

We are also concerned that there appears to have been no discussion of this process with any tenantsí representatives at any level. Input from these representatives on the issue of the appropriateness and implications of this form of debt and on that of informing the tenants would have been constructive.

The amount raised on each home can hardly be significant for a landlord of Peabodyís size. You must have mortgaged a significant number of homes to raise enough to contribute to the development programmes you mention. Can you tell us how many of our homes are mortgaged, firstly here in Victoria Park and secondly across the whole Peabody estate? We only know of the ones where you hold a leasehold interest in a block owned by another freeholder. Are you raising mortgages on homes in other circumstances?

You may well be right that the only occasion in which tenants would notice any effect would be if Peabody defaulted on the debt. Do you have any assurance from the lender that they will not sell on your debt to a rapacious vulture fund or the like or that they will act as a considerate, social landlord if they re-possess any of our homes?

Does your lender place a requirement on you maintain the fabric of the property as collateral? We have a number of cases where major maintenance concerns are facing slow response and it would help to know if you are under this additional obligation. In the case of my own home, I have already asked this of our neighbourhood management team.

In addition to our concerns about the position of tenantsí homes we would be grateful to know the situation of our Community Centre at 5 Gore Road. Does this debt affect the approach Peabody brings to its input to management, costs etc?

From: Joe Joseph
Sent: Monday, April 18, 2016 4:18 AM

I now have a response from my Finance team regarding the enquiry made at the beginning of the month. Please accept my apologies for the delay of this response.

As you know, Peabody is committed to helping alleviate the lack of affordable housing in London and as an organisation we have taken a decision that the best way that we can assist as many people as possible is through the construction of new housing for this purpose. As Iím sure you will appreciate, the construction of properties is an expensive undertaking and developments in recent years have resulted in less public funding for this purpose.

Peabody, consistent with a large number of other housing associations, has decided to use the property assets it possesses to secure the borrowing needed to finance its construction programme. Indeed we are being encouraged by the Government to do this. Security is required whether the finance is sourced from banks, building societies or from public bonds issued by the London Stock Exchange Ė which are the two main sources of funding for Peabody currently.

There is no requirement for Peabody to inform its tenants of the decision to use (AKA charge) properties as security and there is no impact on any residentís tenancy as a result. At the time a charge is undertaken, a resident may receive a letter informing them of the need for a surveyor to visit to undertake a valuation to support the charge. Residents are however not under an obligation to allow the surveyor access to the property and we make this clear at the time we make the request so that they are no inconvenienced in any way.

The same process is adopted for all of Peabodyís properties that have been charged and therefore covers the specific properties you refer to in your email.

I hope we have clarified your concerns in this regard.


From: Mary Pimm & Nik Wood
Sent: Friday, April 01, 2016 12:07 PM
To Joe Joseph

I think it is you I should write to about this but you may need to forward it to whoever can answer my questions. I have copied in our Neighbourhood Management team as it obviously affect how their neighbourhood is managed.

I have discovered that the freeholding company which owns the 5 to 10 Gore Road block has had a solicitorís letter informing them that Peabody has taken out mortgages against the 999 year lease interests you own in the Community Centre at 5 and my flat at 6 as collateral. I also understand that the mortgage you took out on the 999 year lease you held on 42C Gore Road was paid off before the recent sale.

This information raises a number of questions.

1 Why were we tenants in these properties not informed of your decision? It is surely only reasonable that individual tenants and my Associationís Community Centre committee should know of the exact situation regarding ownership. There is no onus on freeholders to communicate this information to your tenants so it falls to you.

2 Why were the tenants in these properties not consulted about the appropriateness of this course of action and the potential implications for them? Clearly this financial arrangement may affect the life of tenants and the operation of the Community Centre who should be properly informed so as to take decisions.

3 Which other properties have been mortgaged? There are nine others on our estate in the same situation as these three where Peabodyís interest is a leasehold one in a block where the freehold is communally owned. Have you mortgaged all of them too? Have you taken out mortgages on other homes on our estate?

4 Why are you raising small loans against the collateral of your tenantsí homes? If you need to go into debt there must be better ways, such as the bond you raised on the Tokyo stock exchange when you purchased the four Crown Estates.

I look forward to your speedy and comprehensive response in the spirit of openness exemplified by Board Chairman Lord Kerslakeís enthusiasm for freedom of information.






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  [RE: Peabody mortgaging our homes] - Posted: 13 June 2016 - 09:56 pm GMT
heather42

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At the time a charge is undertaken, a resident may receive a letter informing them of the need for a surveyor to visit to undertake a valuation to support the charge. Residents are however not under an obligation to allow the surveyor access to the property and we make this clear at the time

a few of us on the shaftsbury estate had letters but we didn't let them in this was last year some time



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  [RE: Peabody mortgaging our homes] - Posted: 19 June 2016 - 06:43 pm GMT
Nik Wood

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Heather

Very helpful to know. We are going back to Howlett chasing for an answer. We plan to include something anodyne on the lines of "we understand that other estates have expressed concerns". You OK with that? We'll keep you posted.

Did you know that the Shaftsbury appears in The Guide to the Architecture of London? It says it is good design and was built by the Artisans, Labourers and General Dwellings Company so it was bought by Peabody at some time in the past.

Nik



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  [RE: Peabody mortgaging our homes] - Posted: 28 June 2016 - 06:12 pm GMT
heather42

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sorry yeah go a head im fine with it just fighting them with a repair at the moment thats been on going for over a year



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  [RE: Peabody mortgaging our homes] - Posted: 14 November 2016 - 02:37 pm GMT
Nik Wood

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Joe Joseph has replied to our TA at last. After a page of waffle about how Peabody are ever so clever at raising money on good terms for good works he says "...approximately 9,900 [homes]are currently used to secure funding this way, equivalent to 34% of our total stock. This information is publicly available in our annual report and accounts (referred to as the "gearing ratio")."

I'm sure that would have been clear to us all! He assures us that it wouldn't affect the credit rating of the tenant.

We're going to ask him why he can't tell us tenants when he's mortgaged our homes. If it is one in three there's a lot of us who ought to know out of simple courtesy.

Will keep you posted.

Nik Wood



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