Suburbia: suing Bellway for letting council tenants in

The Heathers doesn’t look like a cauldron of dissent. The quiet, new housing development on the outskirts of Swindon is a mix of mock-Georgian crescents, redbrick townhouses and stone cottage-style homes, with several schools looking out over green fields. There’s barely a car on the streets the evening of my visit; just a couple of mums pushing buggies.

It was this very tranquility that attracted David Jones, James Hughes and Sarah Barnes (names changed at their request) to the place. James and Sarah thought it would be a quiet place to bring up their respective young families, while David hoped his three-bedroom townhouse would get him back on the property ladder after divorce. Instead, just months after moving in, they are involved in a furious row with the scheme’s developer – one that could soon be replayed on similar schemes up and down the country.

Something strange

David, James and Sarah all moved into their homes in the summer and autumn of 2008. All was calm until January when James noticed all the “for sale” signs in his small street had been taken down simultaneously. “I thought it was a bit strange,” he recalls.

He rang Bellway, the developer which built and sold him his home, who said they had sold 12 houses on the site to Raglan Housing Association. The homes would be rented out as social housing.

James was outraged. When he and the other two buyers first visited the site they say they were told there would be no social housing. The sales representative went through a checklist, which asked whether the buyers had been told about any social housing. On David’s document, the rep ticked “yes” and wrote “no social housing on Bellway site”.

The group believe the value of their homes could be slashed by tens of thousands of pounds because of Bellway’s decision. David, a 35-year-old engineer, was told by an estate agent that the deal could wipe between £10,000 and £30,000 off his £180,000 home – it is difficult to be precise as the downturn will have depressed prices further.

James, a 24-year-old hearing aid audiologist, called his solicitor to find out if Bellway had a legal right to make the sale. She confirmed there was a restrictive covenant preventing the developer selling the homes to housing associations. “Initially we were looking for compensation,” he says, “so I went around the neighbourhood canvassing opinion.”

David was among the first to sign up. He contacted both Bellway and Raglan and found that the housebuilder had paid the landowner £35,000 to lift the covenant on the 12 homes. This put Bellway on a stronger legal footing, but David and James weren’t ready to give up yet.

Campaign

David fired the first salvo in the campaign by writing a letter inviting all the Heathers’ residents to come together to sue Bellway, and posted it through 60 letter boxes. “The solicitors said we have no chance of taking on a major company as individuals – we cannot afford it – but if we band together we can afford to fight this. And the case has more weight if lots of people are saying the same thing,” he explains. Sarah found a solicitor and about 40 people have said they will share the cost, which could be tens of thousands of pounds. They now have to give final confirmation that they will go ahead.

The people who moved in might be lovely but whether they are or aren’t it doesn’t change the effect on our house prices

David Jones, Resident

So what chance does their suit have? Their lawyer felt the group might have a case for misrepresentation because they were told there would be no social housing and because the covenant ruling out social housing was one of the legal documents handled in the conveyancing. They hope to get damages for any drop in value of their homes caused by the change.

They are not alone in their plans to take on Bellway. Residents on two other sites in Hampshire and Newport, Wales, who expected low levels of social housing on their sites, have also been in touch with solicitors after Bellway sold additional homes to housing associations. But Bellway aren’t alone either. Several other housebuilders are turning to social landlords as a way to shift unsold stock in the downturn, and there are rumours of similar anger from residents (see box, below).

Bad associations?

To all three campaigners, social housing conjures up a host of negative associations. David used to live on a new-build development where the pocket of social housing became the “drugs and violence centre of town”, while James and his fiancée moved from a council estate which he says was blighted by drug dealing, vandalism and late-night police call-outs. “It was general rubbish we did not want to bring our children up around,” James says. The Heathers seemed a haven in comparison. “A lot of professional people live here and when we purchased our house we had that in mind,” he says.

But isn’t their antipathy towards social housing really just snobbery? No, they say emphatically, insisting this is not about the tenants. “I do not have an issue with people living in housing association homes,” says James. “My fiancée came from one and they do a very good job for people on low incomes.”

“The people who moved in might be lovely,” adds David, “but whether they are or aren’t, it doesn’t change the effect on our house prices.” He realises the tenants might not view the group’s complaint in the same way, which is why the three decide to stay anonymous for the time being.

But private investors frequently bulk-buy homes to rent out, so surely this is no different? All three shake their heads again. Sarah, 43, who works in the accounts department of a solicitor’s office and is a buy-to-let landlord, insists that being surrounded by private tenants would have less of an effect on house values than social housing. “My tenants have to pay a deposit, the property has to be kept in a good state and someone makes sure they do not upset other residents,” she says.

However, in the fortnight since Bellway’s new tenants moved in there have been very few reported problems, apart from a dog which barks constantly and, says Sarah, some “effing and blinding in the street”.

The group’s ire is reserved for how Bellway handled the situation. “It is the fact they did not inform us they had changed their intent,” says David. “They did not legally have to tell us but ethically they should have.”

A spokesman for Bellway says there was no requirement for the firm to consult the residents when it sold homes to the housing association. “At the time they bought, there was no social housing on the site,” he says. “Clearly, now we have social housing, that would be drawn to the attention of new residents … It is a very small percentage of affordable housing: there are 162 homes on the site and 12 are affordable.”

After this saga, would any of them buy a new home from a developer again? James thinks not, adding it would be “safer” to buy on an established scheme where people have already moved in. Sarah is less sure about whether she would avoid new-build homes in future. But she is certain that she will steer well clear of Bellway. “I would never let them have another penny of my money,” she glares.