‘The Crown Estate always tries to deny the connection between the Queen and us, but she is my landlord; it’s right there on my tenancy agreement.’ So says Crown Estate tenant of 26 years Gordon Wellard.

Sitting in the living room of his one-bedroom flat on the ground floor of a Victorian terrace on the edge of Victoria Park in east London, the 53-year-old supply teacher proudly hands me the royal contract and points to a passage a few lines down. Sure enough, written in bold capitals it reads: ‘Between the Queen’s most excellent majesty of the first part the Crown Estate Commissioners on behalf of her majesty…’.

Mr Wellard is unapologetically proud to be the Queen’s tenant and has fought tooth and nail to remain so. Aside from valuing the heritage of being a Crown tenant, he has, like 14,999 other London Crown renters, much to lose. As a key worker - someone in a public service post such as a nurse, firefighter or teacher - he enjoys an affordable rent of up to 60 per cent below market value. For Mr Wellard, this equates to £325 a month rent.

When the Crown Estate announced in March that it was planning to sell 1,230 affordable homes across four London estates, many tenants interpreted it as a betrayal of the Crown’s historic duty. Along with Crown Estate resident association heads, the part-time teacher led a 200-person protest march, BBC cameras in tow, to the gates of Buckingham Palace where they presented a 1,200-signature petition addressed to the Queen.

Nine months on it seems the Crown’s tenants have won an impressive victory - not that they are willing to admit it. Having enlisted the support of cross-party MPs in each of the four affected boroughs, plus the backing of London mayor Boris Johnson, the residents’ group mounted such a formidable opposition to the sale that the Crown was forced to listen. In August it agreed to overhaul the conditions of the sale to protect tenants’ rents and security of tenure. In so doing it made the deal commercially unviable.

Just weeks later, in October, Inside Housing revealed that rather than selling to a private investor for the best possible price, the Crown had selected Peabody as its preferred bidder. The housing association bagged the sale for £100 million less than the original asking price of around £250 million. Today marks the end of a seven-week consultation with residents during which the 147-year-old social landlord hopes it will have allayed their fears at waving the Queen goodbye.

With warnings reverberating around Westminster that the coalition’s plans to hike rents and scrap life tenures for new social tenants will see communities priced out and broken up, the Crown Estate saga is a story for our times. It is also one in which nothing is quite as it seems.

Conflicting duties

First, the headlines that come with such a high-profile sale and the resident uproar have eclipsed another side of the story. In selling the estates - at Cumberland Market near Regent’s Park, Millbank in Westminster, Victoria Park in Hackney and Lee Green in Lewisham - the Crown had a duty not just to its tenants, but also to the taxpayer; or, more specifically, the Treasury, to which its surpluses go. Critics of the deal claim this duty has been abandoned as a result of political pressure. Their argument is that the deal with Peabody amounts to robbing from the taxpaying many to look after the few.

It’s understood Peabody is paying the Crown at least £100 million less than the original asking price and way off the best the seller could have secured. One would-be purchaser told Inside Housing it had bid around £300 million for the portfolio which he described as ‘the best I have ever seen’.

And these bids appear to have been less cut-throat than residents had feared. The Crown had, in fact, made it clear to would-be buyers that any sale should protect affordable housing and tenants. As a result, most private sector bids from property companies such as Grainger PLC, the UK’s largest listed landlord, and Max Property, the AIM-listed opportunistic investor, were made in partnership with housing associations including Affinity Sutton and Notting Hill Housing Association respectively.

‘Overall we felt it [our bid] was very sympathetic to the residents - and I think most of our competitors did the same,’ says one investor, which had proposed to hold the portfolio for long-term rental income and to maintain key worker tenancies, to sell no more than 6 per cent of properties to pay for repairs and refurbishment works and to maintain current rent levels for at least 30 years.

The Crown defends the sale as the best outcome for all parties - achieving a tricky balance of both its duties. ‘This sale is good value for money for the taxpayer and we got the best price we could within the situation,’ says James Cooksey, the Crown’s head of central London portfolios. ‘Our view on pricing is: yes, the realisation was reduced, but it is still a great result. We have delivered in accordance with our requirements - one of which is to our tenants.

‘We really have listened to their concerns about rents and security of tenure in the first consultation. We are selling to one owner, so the homes will be kept together, and it is clear when you hear how Peabody goes about its business that it is the right choice.’

But it’s not just the Crown’s duty to the taxpayer that has been absent in the reports of this story. Some feel the sale was hijacked by politicians. One high-profile investor compares the political pressure exerted on the Crown to ‘gerrymandering’.

Another says it was simply a case of ‘clumsy timing’ by the Crown: ‘They knew we were in an election year and all the estates other than Westminster were in constituencies with Labour MPs, so it was always going to become a political hot potato. By not waiting until after the election, they have effectively given away more than £150 million of value.’

‘That’s just politics’

Mark Field, Tory MP for Cities of London and Westminster, does little to dispel either of these claims. He says the timing of the election played a major role in this. ‘Any politician will inevitably be focused on local issues like this in the weeks preceding a general election,’ he says. ‘That’s just politics and that’s reality. Also, whether you like it or not, well-articulated groups will be able to raise their voices high enough to be heard by politicians.’

Mr Field also admits having exerted considerable pressure on the Crown - as does Labour MP for Hackney South and Shoreditch Meg Hillier. ‘I had a one-to-one meeting with the CEO and argued very hard against the sale because we cannot risk losing affordable housing in London,’ she says. ‘The Crown hadn’t reckoned on who it was taking on in the tenants.’

The residents’ campaign has either been an advert for localism or a warning shot for the accompanying threat of nimbyism - depending on your perspective. Either way, it has been undeniably impressive. Joannie Andrews, chair of the Victoria Park residents’ association, for instance, is a magistrate. Similarly, her resident association colleague, Madeleine Davis, is a former civil servant. Together they enlisted political support, launched a website, secured media coverage, and helped ensure that the sale was scrutinised by a vocal group of MPs.

As Mr Wellard, who has written to every Crown director and is a self-confessed ‘serial complainer’, explains, despite being unhappy with the Crown’s service, he went along with a resident strategy to praise the Crown as a landlord so it couldn’t use service complaints as an excuse for the sale.

This presents another complexity to the story: the tenants themselves. Much of the political pressure they have brought on the Crown has related to the need to retain ‘affordable’ key worker accommodation in central London. As a result, the Crown has made one of its sale conditions that 90 per cent of all new lettings must be to key workers. However, Inside Housing understands that just 40 per cent of current Crown Estate tenants are actually key workers. Some of the remaining 60 per cent are from a generation housed by a ‘sons and daughters’ policy.

The question, then, is whether most of these residents should be enjoying discounted rents of up to 60 per cent of market value - especially given the thousands of families on social housing waiting lists in the capital who, under coalition plans, may soon face ‘affordable’ rents discounted by just 20 per cent.

Mr Field argues that the ‘key worker’ status is something of a red herring. The main point, he says, is that those who aren’t technically key workers, such as newsagent staff, would still otherwise have to commute in from outside London. Such people, he says, are ‘the glue of society’.

While he concedes that low-income families on long waiting lists might wonder what makes the Crown’s residents so special, Mr Field maintains that it is important to keep communities together. This position, he says, does not conflict with his support of the housing benefit caps which critics say will also force low-income workers out of London. The caps, argues Mr Field, will ‘tackle only the worst excesses’.

Ms Andrews reiterates this point about protecting communities. ‘People have lived here for generations. We want to maintain that - not just key worker accommodation. It is a mixed and balanced community. When people first moved here they were not prosperous or sought after - people wouldn’t touch them with a barge pole.’

Protest subsides

With the long-term future of these communities looking increasingly secure, protests appear to be subsiding. Sources close to the London mayor’s office say that having met with Peabody, Mr Johnson is coming round to accepting the sale. Similarly, Ms Hillier says Peabody has ‘the right mission statement’ and Mr Field is positive: ‘Most residents in the Millbank estate and myself as an MP have a good impression of Peabody,’ he says. ‘The temperature of resistance has gone down and we need to get this deal nailed.’

The consultation ends next week and then the deal is to be put to the Crown’s board in January. But there are still a few creases to iron out. ‘We realise now there is no point in campaigning against the sale,’ says Ms Andrews. ‘We are not against Peabody at all. They have been very forthcoming. But we are awaiting legal advice on a couple of points that we are trying to pin the Crown down on.’

The residents’ lawyers - paid for by the Crown - are clarifying any changes to the procedure for nominations and tenancy transfers, and most significantly, how quickly tenants’ rents can increase to the 60 per cent ceiling Peabody has agreed. Many tenants don’t know how far they are from this cap and worry that their current 9 per cent a year increase could soar after the sale.

Regardless of the outcome of these details, one man who still needs some convincing is Mr Wellard. However, back in his house on the edge of
Victoria Park, even he is starting to see some benefits to the sale. ‘I like the idea that they [Peabody] do community things. If there was
no community before, then certainly there is now as a result of the campaign.’

Begrudgingly, he concedes that losing the Queen’s name from his tenancy agreement might not be the worst outcome for residents. But he still hopes his current landlady played her part: ‘The Queen does have meetings with Sir Stuart Hampton [Crown Estate chair],’ he says, ‘so perhaps she had a word.’

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