God save the Crown Estate

As the UK celebrates the Queen’s diamond jubilee this weekend, there is one role for which Her Majesty rarely receives national attention. As the current monarch she is head of the Crown Estate and therefore also a landlord.

Over the past 60 years the Crown Estate has been involved in the lives of hundreds of communities across the country. It is one of the largest property owners in the United Kingdom with a portfolio worth £7 billion. In 2010/11 it made an annual profit of £230.9 million which was paid back to the Treasury - 15 per cent of which is returned to the Queen.

Although the Queen is the landlord in name at least, the assets are technically owned by the Crown. The Crown’s portfolio is diverse: it includes commercial and retail properties in towns, plus agricultural land, parkland and forestry - and of course, housing. The estate manages homes, shopping centres, business parks and farms and is responsible for more than half the foreshore and almost all the seabed around the UK.

In recent years a growing lobby has argued that the Crown has a duty to be more than a commercial landlord, though. Given it is using public money, some MPs and social landlords believe there needs to be a balance between making a profit for the taxpayer and delivering social good. So how well has it managed this task in recent years - and will Her Majesty’s property division play any role at all in solving the housing crisis currently blighting the lives of her subjects?

Increasing supply

In 2009, Sir Bob Kerslake, then head of the Homes and Communities Agency, called the Crown Estate ‘a responsible landowner capable of delivering much-needed housing stock for families across the UK’. In the same year, the Crown Estate entered into partnership with the HCA to release land for 15,000 homes as part of the government’s ongoing plan to free up publicly owned land for development - it owns around 643,000 acres of land.

Its historic land ownership can be traced back to 1066 - but today the Crown Estate is unable to say how many homes it had built or helped build since Elizabeth II ascended to the throne.

But, as mentioned, the Queen’s property company has plans to help deliver 8,000 homes for sale and rent on its land in four locations by 2020: 6,000 in Thetford, 1,000 in Bingham, 580 at Taunton and 210 at Elsenham. Of these, around 1,600 will be affordable and the rented properties will be managed by social landlords.

However, its involvement in providing new homes doesn’t mean it is helping communities as much as many argue it should. In recent years, the Crown Estate has been criticised by MPs for becoming too focused on creating profits and forgetting its wider social responsibilities.

In 2010, the Treasury committee, which was then chaired by Lord John McFall, said ministers should take a greater interest in the Crown Estate because it struggles to balance generating revenue with ‘acting in the wider public interest’.

Similarly, in March, the House of Commons Scottish affairs committee published a devastating critique of the estate for its dealings north of
the border.

‘At best, [the Crown Estate] has little regard for those needs and interests other than where it serves its business interests,’ the report said. ‘At worst, it behaves as an absentee landlord or tax collector, which does not reinvest to any significant extent in the sectors and communities from which it derives income.’

Social landlord

These criticisms came to the fore in September 2010, when the Crown Estate decided to sell off its remaining 1,230 units of keyworker housing, which targets public sector workers such as nurses, teachers and police on four estates in London. It no longer manages any affordable homes. The 1,500 tenants living in the homes were furious at the prospect of losing the Queen’s name from the lease, and concerned that they might lose their low rents in the face of a sale.

But in October 2010, 19,000-home housing association Peabody was confirmed as the front runner to take over from the Queen as landlord. It bought the homes for £140.8 million - reportedly £100 million less than the asking price - in March 2011 and is legally bound to continue letting to keyworkers at the same rent level as the Crown Estate, and to honour existing residents’ rights.

A spokesperson for the Crown Estate stresses that the business is a commercial venture and that housing is no longer its priority, which led to the sale of the homes. ‘The Crown Estate focuses its investment in its core areas: offshore renewable energy, central London mixed-use, and prime regional retail property’, he says.

Similarly, despite Crown Estate land being available for development in the east of England, John Cross, chief executive of Bedfordshire Pilgrims Housing Association, says he has previously only worked with private land owners. ‘[Working with the Crown Estate] is one of the things we’ve been looking at,’ he explains. ‘A few landlords in this area are working together to influence how public sector [land] releases are being done.’

Peter McCormack, chief executive of 15,000-home housing association Derwent Living, says he sees the Crown Estate as a business. ‘I thought it’d be looking for the best value for taxpayers’ money rather than for broader social good,’ he said. ‘We’d definitely be interested in land from the Crown Estate but it isn’t something that has been on our radar up to now.’

Future plans

There are more opportunities for landlords to get involved in the future. ‘Developing office and retail space in central London will bring a requirement for the provision of affordable housing and in delivering this the Crown Estate would look to social landlords of an appropriate scale, which are specialists in this sector,’ a Crown Estate spokesperson says.

If the Crown Estate helps the HCA to deliver what it has promised, it will go some way to help the 4.5 million people in housing need in this country. As the Queen’s 61st year begins, she surely could want nothing more than to see her subjects in good homes, through an organisation which, ultimately, has her name on its letterhead.