Rent Hike in Hackney Poses Threat to Local Community

Local businesses in Hackney have been facing steep rent increases that have led to the closure of a significant London fashion studio complex, Audrone Fiodorenko reports.

New Land Registry figures reveal that average house prices in Hackney have jumped by more than 9 per cent since last year. While the average cost of a property in Hackney exceeded half a million pounds for the first time in 2014, the price surge has not settled yet.

But it was the recent closure of The Trampery that particularly shocked businesses and locals, with a sudden 400% rent hike from £125,000 to £500,000 per year. A studio complex in London Fields, which housed designers like Jonathan Saunders, Lou Dalton, Holly Fulton and James Long, The Trampery closed shortly before London Fashion Week in September.

The Trampery was opened in 2013 with 13 studios in the building and one shared workspace with about 30 desks for support businesses such as web designers, photographers and social enterprises. Hackney Council welcomed this first-of-its-kind fashion incubator in London and provided The Trampery a grant to buy the necessary machinery.

“It was full the day we opened. In three years, only one company left – it’s the most successful building we’ve ever had,” – says James Craven, community manager of The Trampery.

“Our data was showing that Mare Street has a very high concentration of fashion businesses for the London Fields area. It turned out to be really good for the graduates of London College of Fashion who struggle to find affordable studios in the City.”

James Craven says that when their two-year contract was due to expire, the private landlord was planning to increase the rent by 83%, which Craven described as still “doable”. But just six weeks before they were due to renew the lease, the landlord changed the new rate to 400%.

“We think that commercial rent rise in the area is posing an existential threat to creative and entrepreneurial community. If we are reaching the point where early stage businesses cannot afford themselves in London anymore, it is going to cause long term damage to the city’s economic fabric,” says Mr. Craven (pictured right).

Rob Davis, founder and director of Playniac, a business that was based in The Trampery, comments on the closure:

“The Trampery London Fields was an ideal office for us, so we were sorry to have to leave it and would have stayed there for many years. We enjoyed the community in London Fields and the many vibrant local businesses. Changes like the loss of 40 small businesses and an amazing local cafe reduce the diversity of the area and lead to fewer interesting businesses being based there.”

The Trampery is just one out of many examples of the businesses which have suffered since the East End property boom reached unsustainable proportions in 2014.  Currently Hackney, together with Tower Hamlets, is the most expensive area to rent a property compared to other East London boroughs.

The diagram on the left reveals the streets in Hackney which have been most affected by London’s property boom.

According to recently published London Poverty Profile, renting is more unaffordable in Hackney than the majority of inner London boroughs, with its average rent accounting for 76% of lower quartile monthly earnings.

More proof extreme wealth is wrecking London: Everyday people spend everything on rent. https://t.co/zAsHXm7ktR

— Jason Cochran (@JasCochran) October 27, 2015

Bike shop closed down – they couldn’t afford it. Now we get yet another letting agent on the road @KeatonsLondon. Parasites. #Housingcrisis

— Digs (@Hackney_renters) October 30, 2015

Hackney housing campaigner Digs wrote: “Ten years ago, most of London’s poorest lived in social housing. But a decade of dizzying rent hikes, flogging social housing and the unregulated nature of the property market has pushed more and more people into private renting and more and more renters into poverty.”

Hackney Council is currently campaigning to improve the private rented sector through its 10-step campaign (detailed in the diagram to the right). In addition, the authority has launched a petition and a poster to promote the legal rights and responsibilities of tenants and landlords.

Philip Glanville, Cabinet Member for Housing, said that the Council is committed to building 2,700 new homes with 500 for shared ownership marketed at local people of Hackney. The councillor also stresses the need for “more national and London wide action on rents and fees”.

Mr. Glanville added: “Government sets business rates, but we are committed to pushing for affordable workspace and incubator space through planning and bringing more disused space into use.”

Take a listen to the following podcast to find out how Hackney residents have been affected by rent increases:

Audio: please specify correct url

Be sure to let us know your thoughts on how London’s property price boom is affecting boroughs like Hackney in the comments section below, on Facebook or on our Twitter feed.