Guardian News and Media
A London property company is charging £255 a week for “studio apartments” as small as three metres by three metres which tenants claim are “worse than prison cells” and which breach statutory overcrowding regulations.
Nineteen of the tiny, dilapidated rooms are being let out above a McDonald’s restaurant in Islington earning a multi-millionaire landlord and a sub-letting company an estimated £400,000 a year in rent, a Guardian investigation has revealed.
The rent per square metre is more than twice other one-bed private rented flats in the same area.
Recently built studios on the same road for students are double the size but cost less.
Rent on the unfit housing was being paid largely by the taxpayer through housing benefit, although Islington council has now declared it will no longer pay because the units represent a “category one hazard” under health and safety regulations in terms of crowding and space. It said the taxpayer was being “ripped off”.
The council has now issued an order rendering the tenancies void in two months. It represents a new low in London’s housing crisis, where at least 42,000 new homes are still needed each year to meet demand and prices are rising at almost 20% a year.
The owner is Andrew Panayi, a wealthy landlord with 250 properties in north London. He bought the former hostel in 2004 and later fitted plastic showers, two ring hobs, small fridges and a toilet and marketed them as studios.
Some tenants have described life in the flats as “unsafe and inhumane” and have complained of a lack of hygiene caused by the proximity of cramped toilets, showers and cooking facilities, back and leg injuries from having to constantly move furniture, and depression.
Darren Ricketts, 39, a new occupier who arrived this week despite the banning order said he could not believe the lack of space and cost. “When I signed the papers I saw the rent was £258 a week,” he said. “I said to the lady that’s a mistake. £58, yes, but not that much. The landlord must be raking it in. I was shocked. I am grateful to have a roof over my head, but this morning I woke up and thought what am I going to do with all my stuff.”
Another tenant, Nejat Mohamed Ali, 45, said: “I have bruises on my legs from constantly pushing the bed around so I can get to the shower or the kitchen. The hot cooking plate is less than 60cm from my bed.” She added: “I am very depressed. I used to live with dignity... councils are supposed to invest in property and not spend £255 a week on prison cells. It is abuse of the taxpayer.”
Panayi blamed the tenants for making the homes too cramped by piling in too much furniture.
“These places are designed for single people,” he said. “They should have a single bed but they asked for double beds and the beds are too big. There’s more than enough room for a single person.”
James Murray, Islington’s executive member for housing, said: “This shows how appalling the housing crisis has got where people who are desperate for accommodation are being crammed into tiny units and tenants and the taxpayer is being ripped off by a rich landlord and a property company who are skimming off handsome profits.”
Harry Lewis, 54, an unemployed father of three, said the cramped dimensions of his home meant he could never entertain his children or family. He said he survived on take-aways and was suffering from depression. “I have been here three years and I am suffering health problems,” he said. “You have to eat, go to the toilet and wash all in this small space. There are huge issues.”
“I’m stressed,” said his neighbour, Evzen Kessel, an unemployed street-cleaner from the Czech Republic. “All I can do here is sleep. I spend all day outside because there’s no room here to live.”
Panayi has sub-let the properties to Investing Solutions Limited (ISL), which describes itself as a rent guarantee company. Many of the tenants were referred to ISL by Fresh Start Housing, a charity which sets out to provide “support for homeless people and those about to be homeless”. ISL receives the £255 a week payment from the government’s housing benefit pot and then pays Panayi around £150 a week. The maximum the government will pay in housing benefit for a one-bed property in that part of London is currently £258 a week.
A spokesman for ISL said it was “very, very shocked” by the decision to declare the flats unfit for human habitation. It said the high rent was to reflect the “high risk tenants” who often do not have money for rent advances or deposits and can sometimes have their housing benefit frozen at short notice.
“The ones I saw were normal studio sized,” said Gerry Sandhu, a manager at the firm. “We don’t measure them. That’s the landlord’s responsibility.”
John van Someren, trustee of the Fresh Start charity, said it would prioritise rehousing the people it referred. “We will have to ask the landlord what the heck he is doing placing our tenants into accommodation below legal requirements,” he said. “Then we will have to ask Islington why they are paying housing benefit on properties that they say are in breach of size regulations.”
Islington said there is no inspection before housing benefit is paid out, although an environmental health officer did visit in 2012 when it was assured the property was a hostel rather than studios. Panayi attacked Islington for not consulting him before issuing the closure orders. “Islington will have to rehouse these people in boarding houses once they have been evicted through bailiff action,” he said. “The council should have come to speak to me first.”
He said that from next week he will begin a redesign to add around a third to the space of each unit and make them “larger and more luxurious”.