Peabody Trust must sell 1100 homes to meet decency targets

The Peabody Trust will have to sell up to 1100 homes in order to raise the £212m it needs to meet the decent homes target by 2010.The figures are revealed in its newly published annual review, which also contains outspoken criticism of the government’s failure to provide the landlord with any extra funding to reach the decency standard.

In the report, Peabody chair Pam Alexander called it a “sad irony” that government support had “not been forthcoming”.

Another passage reads: “If the government is serious about improving both the quality and supply of social housing, there is a real and urgent need to provide funding to ensure that its target can be met and the existing supply of social housing in areas of high demand is conserved.”

Although the ODPM was not able to comment definitively on whether any more cash would be provided, it is unlikely that the government will act to prevent the sales.

Peabody chief executive Stephen Howlett declined Housing Today’s request for an interview, but in a statement he said: “Essentially we’re just getting on with the job.

“We’ve got a sound financial strategy in place to reach the 2010 target, which the Housing Corporation supports. This year we are working closely with residents and local authorities so that we can accelerate the programme in April 2005.”

The statement added that £156m was required to bring the 60% of the trust’s 19,500 homes that do not presently meet the standard up to scratch.

To raise this will require the sale of 650 homes over the next six years – to date enough sites have been identified that will raise £144m. A further £12m will be raised through sales of land to make £156m.

The additional £56m that will take the trust to the £212m target that it says will “deliver modernisation beyond the standard” will require further asset sales and at present Peabody estimates 450 more property sales will be necessary to achieve that.

But the annual review warns that “significant investment will also be required beyond 2010”.

The chief executive of another housing association who wanted to remain anonymous said: “Of course it’s not realistic for Peabody to go cap in hand to the ODPM. If it gives money to bail out Peabody where will it stop?

“Would we still be able to claim to be an independent sector – I doubt it.

“I suspect Peabody are on their own on this one.”

The Trust’s problems were first revealed by Housing Today last year when it emerged that it was cutting posts in its development team, scaling back its building plans and beginning to sell off sites in order to raise funds to meet the decent homes standard (HT, 19 December, page 7).

It also emerged in January this year that one of Peabody’s flagship schemes – BedZed in Sutton – had run £10.6m over its original £14.168m budget (HT, 9 January, page 7).