Talking about council flats: the Grenfell Tower disaster

Hi guys. More grim, awful news from London today with the devastating fire that engulfed a block of flats in West London. I was going to talk about the Lee family spat but felt that this topic was closer to my heart as it is an issue that affects real people, not just an elite family. I'm sure you've seen shocking footage of Grenfell Tower going up in flames and I'm not here to pour over the grim details of what happened, but I want to talk more generally about council housing in the UK and how it compares to HDB flats in Singapore, given how so many Singaporeans do live in HDB flats. Let me stress that only 17% of the British population live in council housing - of that 17%, a lot of them are very poor, so this is by no means representative of how richer British people live. This is a major problem that no government has managed to solve since the 1980s. I will use the Q&A approach to unpick this rather complex issue.

Q: What is a 'council block' or 'council flat' in the UK? 

A: The government in the UK builds housing for the poor who cannot afford to buy their own homes. These government built dwellings are known as 'council housing' and they can come in many forms: they can be houses in rural areas where land is plentiful but in more crowded cities, they tend to take the form of blocks of flats. Depending on how the relative poverty of the tenant who has to rent the flat from the government, some pay a little rent, some pay near market rates (say if they are working and have a regular income) whilst others get the housing for free (yes indeed, free). This has been something the British government has been doing since 1916, when the first council housing was built. When you have a cluster of council blocks in the same area, it is referred to as a 'council estate'.

Q: Wait wait wait, did you say some people can live in a council flat/house for free? For free?

A: Well yes. But it is not so simple. Demand for council housing is far higher than supply so there is a long waiting list and a whole range of criteria before you're offered a council flat/house. You have to be local - you can't just turn up in the most desirable area of London or Manchester and demand a council house, locals who were born there or at least have lived a long time in that very post code get priority over you. A British citizen cannot just turn up and say, "gimme a council flat" - there is usually a very long waiting list and you get what you're given, you don't get to pick the size or the location. I knew of this case of an old man, a widower in his 80s with no children - his savings were depleted and he was in poor health, so the government literally gave him a flat to live in rent-free until he died. Quite a pitiful case, really. But there are also young, unemployed women deliberately getting pregnant and having babies because they know that will allow them to jump to the very front of the council hosing queue. If you have no education, no skills, no jobs, no prospect of getting a decent job, what have you got to lose by having a baby and gaining a new flat, not to mention generous government subsidies? The system is encouraging such behaviour, Singapore doesn't have this problem and on this issue, I agree with the Singaporean system but the culture in Singapore is extremely different.

Q: There was a lot of talk about people in Grenfell Tower being poor people - to what extent is that true? 

A: Well you can't dance around the issue - that is indeed true. When demand is far higher than supply, then the most desperate cases get priority: so the unemployed single mother with two young babies would get bumped to the top the the list whilst a working adult with a decent job will have to wait and awfully long time. When you have a limited supply of food, the hungriest get fed first and it simply isn't a "first come first serve" system, such is the nature of our government system, the poorest, most desperate in our society are indeed taken care of whilst those who are more able to work are not just expected to take care of themselves, but we pay more taxes to take care of the weak and the sick amongst us. So the kind of people who do get allocated a flat in a place like Grenfell Tower wouldn't be there by choice, but desperation and poverty, if I may be blunt about it. There are some pretty grim council blocks in the UK with terrible reputations - crime is rife, old people simply don't feel safe even in their own homes. But if you house all the most desperate social cases in an estate, then it doesn't become a desirable place to live because you would worry about your safety if you knew there were dodgy people doing and/or dealing drugs on the estate.

Q: Good grief, are all council estates that grim? Or are there nice council estates? 

A: If I may be fair, not all council estates are that grim and bad. Some of the newer council housing built in the last 20 years have been thoughtfully designed, they are built to a much higher quality and standard - but then that creates a different problem when they become too nice. You see, there is a 'right to buy scheme' introduced by Thatcher's government in the 1980s - that means that after a council tenant has lived in a property for some time, the longer you have lived in the property, the bigger the discount you will get. So what has happened is that a lot of council tenants have taken advantage of this scheme and bought their nice council homes from the government and then the property changes hands on the private market once they cease to be part of the pool of the government's council housing. There is always high demand for nice properties in the private market anyway, so the nicest council properties have mostly ended up in the private market because of the high prices people are willing to pay to get their hands on these nice properties. So if the government continues to build extremely nice council housing, then whilst it seems like a lovely gesture to give poor people a decent place to live, but eventually they will end up in the hands of the private sector. Only the more grim, nasty, older council estates such as Grenfell Tower mostly stay in government hands because the buyers in private sector with cash have no desire to get their hands on such undesirable properties.

So imagine if the government builds a very nice council block - beautiful flats, spacious, nice location, convenient for public transport, near local schools - everything one would desire for a new home. These council flats are rented out to poor people at heavily discounted rates, it all works according to plan for while. But then they soon realize, hang on, I can buy my flat for a lot less than the market price for this flat because of the right to buy scheme - I could potentially make a lot of money simply by buying the flat and then selling it off. The government assumed that people wouldn't want to give up a nice home if they liked where they live, but the temptation to an easy buck is often too strong and many nice properties end up in the private market with buy-to-let landlords snapping up the nicer council estates. Now if you were to go to a buy-to-let landlord (like me, for example) and plead poverty and ask for a discount, well, I'm just going to tell you to go away as your poverty isn't my problem - it is the government's problem and I can easily find a tenant who will pay the full asking price. If you rent from the government you can get massive discounts if you plead poverty, but you're not going to find any mercy on the private market. You can see why we have a major public housing crisis in the UK as a result. Council estates do exist - but the stock is being depleted through this scheme.

Case study: Ingestre Court & Trenchard House, Soho W1. 

I have lived in a council block from 2004 to 2016. Ingestre Court was one a rare find because it was located right in the heart of Soho, that is London West End's shopping and entertainment district. A Singaporean comparison would be if they built a HDB block a stone's throw from Orchard MRT station - that's how incredibly central it is. A total of three council blocks were built in that area in the 1960s and 1970s, these were built on sites they were bombed in WW2. A brewery and beer bottling factory used to exist in the site prior to the war. Ingestre Court was the newest of the three completed in the late 70s. These flats were built prior to the area becoming so fashionable. The block is 15 storeys high and most of the flats in the higher floors have changed hands and are now in the private sector. I lived on the top floor of the building and had amazing views over central London. As a well-educated, wealthy working adult, I would never get on the council housing waiting list as the system is not designed to house people like me - but I did want to live in a nice property in central London and the flat itself was rather nice, the views were second to none. I bought the property for about £250,000 in 2004 on the private market and estimated prices for the best flats in that block are around the £800,000 mark today.  No, I didn't sell it when I moved to Camden. it is a good investment: I am a a multi-millionaire who owns several properties in London (see? told you I was too rich to get on council housing system).

So what was the block like? Well there are a total of 52 flats there, with between one to two people living in each one-bedroom unit. The outside was nothing to write home about, people would usually ignore it as it was a dull, concrete looking block that was just a part of the landscape. But once you get into the flats that had changed hands into the private market, the home owners would have spent a lot of money renovating their flats to make them extremely modern and tasteful. I currently rent that flat to an analyst who works for a hedge fund, his offices are located a short walk away near Regent Street given the long hours he works, he liked the idea of living close to his office and could afford to do so. Those who still continue to rent the flat from the council tend to be elderly residents who have lived there since the 1970s and pay very little or no rent at all. The typical resident in the block these days tend to be single, young working professionals or at least couples, who love the excitement of living right in the middle of the West End.

Why would the government build flats like that right in the middle of a shopping, entertainment district, you may ask. You certainly don't see HDB blocks on Orchard Road or Shenton Way. Well some were built before property prices in the local area became insanely high. Others are a result of the government's policy to ensure that there is enough council housing built in city centers: so on the same street as Ingestre Court is a brand new development called Trenchard House. It is a mixed-use development comprising of retail units and flats: amongst the flats, 78 are designed for the private market and 65 are designated as 'council housing'. Give it a couple of years and you'll soon see many of the 65 council flats change hands into the private market, given what a beautiful new project Trenchard House is. Planning permission would only be granted for Trenchard House if they promised to include some council housing as part of their project, given the acute shortage of council housing in central London. The council flats in Trenchard House are extremely nice and a far cry from the kind of flats you would find in Grenfell Tower. Whether those on the waiting list get assigned a flat in Trenchard House or Grenfell Tower is pretty much down to luck, really.

Q: Isn't this really bad policy on the part of the government? 

A: Of course it is! What a car crash of a catastrophe it was! When Thatcher introduced the 'right-to-buy' policy in the 1980s, she was desperate to cling on to power so she had to pull out something like that to look as if she cared about the working class folks trying to get on the housing ladder. Sure it worked, it proved to be highly popular but the effect it had on the stock of council housing was devastating. The money earned from the sale of these council homes was never ever going to be enough to build new ones to replace the depletion of the stock, given the huge discounts given under this scheme. It was a really shortsighted, poor, downright stupid decision on the part of a politician desperate to cling on to power by any means necessary. Given the popularity of the scheme, it would be political suicide for any prime minster to try to scrap it at this stage, so no prime minister would dare to touch this scheme. The whole concept of council housing will only work if you do have a stock of housing that you can rent out to the people on your waiting list and if you start depleting your stock like that by selling off council homes like that, well, you're effectively sabotaging the whole scheme. There are winners and losers with this scheme: the winners are council tenants who were able to get on the housing ladder at a bargain, then make a big profit by selling it on the private market. The losers are those on the waiting list, facing a housing crisis as the stock of council housing dwindled. By that token, the winners were usually those who had jobs and money, the losers were the most desperate and poverty stricken in our society but Thatcher must have figured that the latter were never ever going to vote Conservative in any case, so screw them.

Q: How bad was Grenfell Tower and others like it? 

A: To be honest, on the scheme of things, it wasn't that bad, it wasn't the worst. Yes it was in a relatively poorer neighbourhood in North Kensington - not to be confused with Kensington proper or South Kensington which are very rich neighbourhoods. But still, there are far worse neighbourhoods in London, far poorer areas than North Kensington. It is an area of London with a huge wealth gap. You see, the older council houses built before WW2 were actually to quite a high standard and were built for families - sure they need updating, sound proofing and renovations but they are remarkably respectable. Then after WW2, a lot of people needed housing and thee was a huge demand for council housing then. Council blocks were put up in a terrible hurry in the 1950s and 1960s as the population grew after the war and those were of a terrible quality - some of the very worst ones from that era have been demolished since to make way for newer ones. Things started getting better in the 1970s, but change was gradual - Grenfell Tower was designed in 1967, construction began in 1970 and completed in 1974 - so it was at the beginning of the era when council blocks began to get better, but still it bore the hallmarks of the grimmer, older blocks from the 1960s.

We're not just talking about an outdated appearance here, these blocks were designed for small families or couples but often you could find 5 or more people living in a flat really designed for 4. Sure the family could go back to the council and say, "I have had another child, can I get a bigger council flat?" The reply would be, "fill in the form and join the waiting list - it's a very long wait." The problem isn't the fact that the building is old - London is full of old buildings but if you were to go to a richer neighbhourhood like Knightsbridge or Chelsea, the old buildings there are kept in immaculate condition and safety isn't even an issue there. With blocks that are over 40 years old, they need to be maintained and renovated to prevent them from literally falling apart - a lot of the hardware from the lifts to the plumbing & heating systems to even things like the windows need replacing after so many years. Rich people can spend money on the necessary renovations - in the age of austerity, councils often have to make difficult choices about which repairs are most urgent and which are but cosmetic. The government doesn't have a bottomless pot of money to spend on council housing and maintaining old stock is often less of a priority than creating new stock. Sometimes corners are cut, bad decisions are made and sadly in this case, the consequences are heartbreaking.

Q: Having lived in a tower block, what are your feelings about the disaster at Grenfell Tower? 

A: Sigh. Of course there's a part of me that did think, thank goodness that never happened to me when I lived in Ingestre Court. It is clearly harrowing, terrifying, distressing when you look at the images from Grenfell Court. When I lived at Ingestre Court, the managing agent of the building were a company called City West Homes (CWH) and the problem with any such organization is that the people at the very top were very highly paid and are often out of touch with what is going on at the grassroots level. Sometimes the people at the local offices were competent, sometimes not - but they were not paid much to work in this sector and the most desperate cases often occupied 90% of their attention. So whenever something went wrong in the block, say the heating and hot water failed - they would drop everything and made sure the elderly residents were okay and the rest of us were ignored, well we're younger and able to fend for ourselves in a crisis. Then the families with young children got their attention and being a male adult living there who acquired my flat through the private market, it could be frustrating as there was a pecking order for their attention and I felt really low on it. That was part of the reason why I wanted to move - look, I pay my servicing fee for the block, so why should I be treated as a lower priority just because I happen to be richer? Now is that really fair?

There was a huge divide between the richer, working professionals who had come in through the private market and those who were renting at a hugely subsidized rate from the government. Now if you wanted to buy a property like that, you had to be bloody rich - if you wanted to rent a property like that on the private market, again, we're talking about paying at least £2000 a month for rent, you're rich. Then there are the desperately poor folks who are struggling to make ends meet, all living in the same block - it is a very strange mix to say the least. I have had so many problems with the staff at CWH as they seemed more equipped to deal with problems arising from elderly and vulnerable residents but when it came to dealing with the more difficult questions pertaining to say renovating the block and fire safety, they were totally stumped. You see, the desperately poor folks who are given a council flat, they are just so grateful to have a roof over their heads they don't ask too many questions. The folks who came through the private market and have paid a lot of money to live there will ask more questions and demand a higher standard of service. So if the lift breaks down for 24 hours, you know which group would complain and which group would just keep quiet.

It would be wrong of me to make any speculations about the causes of the Grenfell Tower tragedy but having dealt with that system, yeah I can see why it happened. I remember how I would just bypass the staff at the local management office and go directly to more senior directors in the organization if I ever had any serious concerns. Given my experience in sales, I know how to get to the decision maker who can resolve an issue quickly, I would never deal with low-level staff and wait for them to go talk to their bosses. You want something resolved quickly, always speak to the decision maker. It boils down to the simple fact that the low-level staff in any organization are never ever that highly paid and by that token are never ever that highly trained/educated, you simply do not hire Oxford graduates to do this kind of front-line customer services work in public housing. No, the Oxford graduates expect much higher salaries. So mistakes can be made, errors ignored or slip through the cracks and usually one hopes that it doesn't lead to catastrophic consequences like Grenfell Towers, but this would serve as a reminder for the line managers in all housing organizations to make sure that they keep a much closer eye on the work that their front line staff do. If residents do make a complaint or raise a concern, it has to be followed up with rather than swept under the carpet. Many complaints were made prior to the devastating fire at Grenfell Tower but the management agent did nothing.

Q: How do UK council housing compare to HDB flats in Singapore?

A: Let's start with the similarities: in both the UK and Singapore, the older blocks are the ugly, less desirable ones whilst the newer ones are a lot more pleasant. In both countries, demand for housing is extremely high so there is pressure to preserve and renew old housing stock, rather than just condemn them and build new ones. But as for the differences, HDB blocks are always designed to pack in as many people as possible into a densely populated area, whilst British council housing does vary in terms of quality and density - in rural areas, the council would build houses instead of flats because land is so plentiful and cheap. The percentage of home owners in Singapore is far higher and those who rent are in the minority - that has a lot to do with Singaporeans tending to live with their parents until they get married. The percentage of people who rent through the UK council housing system is a lot higher by that token, simply because generous discounts are offered to those in difficult circumstances. There is no stigma when it comes to living in a HDB flat in Singapore as over 80% of the population live in HDB flats whilst in the UK, only about 17%  - but again, there isn't a stigma with council housing per se given how much of that has actually slipped into the private market over the years and some council housing stock (such as Trenchard House in Soho for example) is actually amazingly desirable. But there's no dodging the issue that there are really nasty, grim council estates in the UK.

Q: So you are saying that HDB flats in Singapore are better?

A: Only from the point of view of comparing the very worst: if you were to take the oldest HDB flats in Singapore (say in somewhere like Tiong Bahru or Queenstown) and compare it to the worst council estates in the UK, oh even the oldest, worst flats in Tiong Bahru or Queenstown are far better. It seems ironic that the country with the generous welfare system has far worst public housing than the country where the government simply doesn't believe in welfare. Credit to the Singapore government, money is the solution to the housing crisis and the more money you spend on building homes, the better they will be. Of course, richer, well-educated, highly trained professionals with good jobs can always move countries but they're not the ones dependent on public housing, whilst poorer, less educated, unskilled workers who depend on this kind of public housing will never ever qualify for a work permit in another country where they may be better off. So for those at the bottom of hierarchy, at least from a housing POV, those in Singapore are better off indeed. Such is the way things work in Singapore - the poor in Singapore rely far more on their family and friends for help whilst their counterparts in the UK simply turn to the government first for help. For everyone else, well, the quality of your life really depends on how much money you earn and if you want a better life then that's up to you to earn more money to fund the lifestyle you want. Your fate is in your hands, not the hands of the government.

Okay that's it from me on this topic. This is an incredibly sad tragedy and what most of us want to see now are the people who have been responsible for the poor decisions made - particularly with the flammable cladding of the building - strung out to dry and made to face the stiffest penalties under the law. But looking beyond this to the future, we still have no answers to the public housing crisis in the UK. Do leave a message below, many thanks for reading.