Hackney Fashion Hub: A parallel universe of tourist wealth, launching in 2014

A tsunami-sized wall of cash is heading to Morning Lane, a shabby thoroughfare in Hackney - but who will benefit from it?

Two years after the riots, a tsunami-sized wall of cash is heading towards Morning Lane, a shabby thoroughfare in Hackney.

The local council secured £5m from the Greater London Authority’s regeneration fund for areas affected by the riots and it is being spent on a project costing tens of millions and called the “Hackney Fashion Hub”. Fashion outlets, a café and design studios will be housed in two new seven- and five-storey buildings and 12 railway arches located opposite and adjacent to the old Burberry factory, which has attracted busloads of Japanese tourists since it opened as an outlet store in the 1990s.

The developers are the Manhattan Loft Corporation, “the company who brought loft living to London” and whose recent projects include “67 of the most unique apartments in London, on the top floors of the Grade I-listed St Pancras Renaissance Hotel”. The architect is the trendy David Adjaye and work starts in 2014.

As well as big-brand fashion salesrooms, the development will include design studios “where locals can show their work”. The stress is on the word “local” and the council is keen to persuade us that this project is not just to attract tourists and investment from the Far East.

So we, the locals, should be over the moon about it, shouldn’t we? I spoke to Lia, who lives in Hackney and works at a vegan, volunteer-run café on Clarence Road, a focus of the London riots. She knew nothing about the development. But some local people do know and are into their designer brands – as the discerning young men who looted the Carhartt outlet near London Fields showed in 2011. Perhaps this is why David Adjaye’s shops on Morning Lane have massive, futuristic-looking riot shields on the front. I asked Adjaye Associates about them and got this reply: “No, those are simply shutters; all shops have shutters on them. They are shutters that cleverly also function as rain shields.”

Hackney Council claims that the new hub will be physically integrated with and encourage visitors to go to “other areas of Hackney” (such as the betting shops and pawnbrokers on the Narrow Way) and “new signage” will encourage them to do that. But in reality it is separated from Hackney Central by the bus station on Bohemia Place, while retailers on the Narrow Way in central Hackney, a site of rioting, are excluded from the party.

They are somewhat disgruntled. So the council has painted bright geometric shapes on the road outside their premises. “Next week we’re getting some pot plants,” said Ayub, who owns a local clothes shop. “They’re trying to kill us.”

So everyone has been catered for: the underclass in the ghetto of the Narrow Way and Clarence Road; the Chinese, South Korean and Japanese visitors in their parallel universe of tourist wealth on Morning Lane; and those who can afford the new flats on Chatham Place. If the shopkeepers still feel dissatisfied, they could participate in a scheme the council has set up called Hackney Is Friendly; it’s a “place to find a friendly face on the Narrow Way. Come in and say hello if you’re passing.”

 

It's all no change in Hackney: a simulated view of the new fashion hub. Photograph: Getty Images.

This article first appeared in the 12 August 2013 issue of the New Statesman, What if JFK had lived?

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.