The deals beneath

“It is the same with any life. Imagine one selected day struck out of it, and think how different its course would have been. Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation of the first link on one memorable day.

Charles Dickens, Great Expectations

In 2016 I was invited to become a technical advisor within the Estate Regeneration team at the Department for Communities and Local Government (now the Ministry of Housing, Communities and Local Government). The team reported to a panel co-chaired by Lord Heseltine and the Housing Minister of the day. This panel, including a number of industry doyens, was charged by the Prime Minister to support the regeneration of 100 housing estates. It is a worthwhile agenda and one that I was delighted to be involved with. These are projects that are being led on the ground by some of the most talented and committed individuals in the property industry.

Regeneration can be a nebulous term and I see it widely overused. This is especially true of private developers looking to dis-associate their shiny new scheme from its immediate setting or to talk up the values. Nine times out of ten I would describe these schemes as a ‘merely’ development. For me, urban regeneration is a process in which the public sector is required to address market failure in some form. In doing so, the involvement of the public sector brings a broader social and economic agenda alongside the private sector’s profit motive. Regeneration is therefore re-imagining of place – in a physical sense but also as the scene of peoples’ lives. Regeneration seeks to reverse conditions that negatively affecting the health, security and economic potential of their residents. As I said, worthwhile.

This is not a new concept. Indeed, in his book “Remaking London” (2013) Ben Campkin, an academic at UCL, notes the use of ‘urban regeneration’ as a phrase linked to the redevelopment of slum districts dating to the late nineteenth century. Campkin goes on to note that there are striking similarities between the regeneration areas identified in the 2011 London Plan and Abercrombie’s 1943 County of London Plan. He also directs us to the fascinating short film “Paradox City” (1934) - available to watch on the British Film Institute’s website. This early fundraiser for the St. Pancras House Improvement Society clearly shows us an early example of regeneration in action.

Evidently there are no simple solutions to the challenges of physical concentrations of deprivation. And we have been trying for over 100 years now. As such, these issues have been a long held interest of mine. As an undergraduate in the late 1990s, my dissertation focused on the contribution of the design of housing estates to crime and the fear of crime. As a postgraduate, my research turned to the potential for new forms of public finance to facilitate regeneration. As a development consultant, alongside my ‘regular’ development projects, my colleagues and I would spend a lot of time helping public landowners to pursue positive social and economic outcomes from their land transactions. In trying to avoid creating places capable of negative social outcomes, this led me to look long and hard at how we got here. What events conspired to create such long shadows?

Many of today’s regeneration projects are seeking to address social and physical issues created by redevelopments that took place only some 30-60 years ago. These sites themselves often stem from some form of early twentieth century ‘slum clearance’ programme. These first (re)generation projects created both the solidly built mansion blocks of the 1930s (see “Paradox City”) but also the slightly later, and more problematic, system-built flats and houses of the 1950s and 1960s.

It strikes me, therefore, that there is a direct line of sight between today’s regeneration programmes and the slum clearance programmes of the early 20th century. And in turn, I suggest this line of sight extends to the original development that went on decline in to the slums that were ‘cleared’ or ‘improved’, to use the term of the day. Ben Campkin’s book brought to my attention an impressive body of research by Linda Clarke - published as “Building Capitalism” (1992, republished 2011). Clarke, now at Westminster University, provides us with a complete description of the development industry in the 18th and 19th centuries. In addition to describing the evolution of the construction process she provides us with a highly detailed account of the land transactions behind the initial transformation of (inner) north London from the rural to the urban. Her study provides wide ranging detail of the nature of the deals done by the owners of the ‘great estates’, including Grosvenor, Bedford, Southampton, Brewers’, Skinners’ – and especially the Somers’ family estate. If you are familiar with Simon Jenkin’s very accessible “Landlords to London” (1975) or Gillian Tindall’s “The fields beneath” (1980) but you have always wanted to know more about ‘how’ then Clarke has all the answers. In addition to the study of the construction process itself, Clarke’s research looked at how each of these land owners structured their affairs to facilitate development.

What is interesting to me is how some of these key decisions and specific transactions can be identified as contributing to the long shadows that we are still addressing. And more importantly, the lessons we can draw even now.

Much of the focus of Clarke’s research looks closely at the development of Brill Farm, part of the Somers Estate, forerunner to what we now call Somers Town. Somers Town is today found wedged in between Euston and St. Pancras Stations, north of the Euston Road. However, the original catalyst for change in this area was the construction in 1756-7 of the New Road which ran from Paddington to Islington (now Marylebone Road and Euston Road). The New Road was created to relieve heavily congested east west route of Oxford Street and Holborn and drive cattle to market at Smithfield. Passing between the farmland of the Somers and Bedford estates it was to open up this part of north London for development.

Rather than joining the illustrious list of London’s ‘Great Estates’ the Somers’ estate in particular would quite quickly deteriorate in to what become the focus for the St. Pancras House Improvement Society in the 1930s and the scene for early regeneration programmes. And today still, Somers Town finds itself within the country’s highest 7% on the Government’s Index of Multiple Deprivation.

In the 1898 notes accompanying his poverty map of London, Charles Booth notes

“Somers Town…is one of the worst areas remaining in the whole of the subdivision. It has improved somewhat, and the police give it a fair character as regards criminality. But it remains a dark, if not very black corner of London”.

Booth informs us that being one of the worst, it was once even worse. It would be fair to say that this place had gone from farmland to a dark ‘Dickensian’ slum in a very short space of time. Indeed, Dickensian is apposite since Charles Dickens was familiar with the area and actually spent some time in his youth living here. The area is referred to in a number of his works including The Pickwick Papers (1836), David Copperfield (1850), Bleak House (1852), and A Tale of Two Cities (1859).

Commenting particularly on Little Clarendon Street, at the heart of the Somers’ Estate, Booth describes it in 1898 as “A narrow thoroughfare of bad repute. The local name for the street is ‘Little Hell’.” The causes of these conditions interested Booth who litters his notes with records of his conversations with local policemen about the roots of decay, crime and criminality. However, in commenting on Little Clarendon Street in particular, he goes further than normal and records the landlord for this road as being Lady Henry Somerset [daughter of the 3rd Earl Somers]. Compare this to his observations of Chenies Place, a short distance away and still part of his Somers Town notes - “3 storey houses, working class. Well built. Duke of Bedford’s property.” Jenkins tells us that this outpost of the Bedford Estate was “scrupulously” planned and laid out after the Somers Estate (c.1830). It would go on to be mostly cleared for the enlarged Euston station in the 1960s.

Clearly then, in addition to the other contributing factors, Booth felt that there was a relevant point to make by drawing links between the freeholders of the properties and their physical and social conditions. In his notes Booth reveals that it is suggested to him that Lady Somerset is not only the freeholder but also the “…house landlord, collecting rents through an agent”. Given the seriousness of such an allegation (propagating slum conditions) he follows this up and concludes, in his notes, “Subsequent information goes to disprove this information”. Indeed, based on the 99-year development lease common at the time, and the fact that Little Clarendon Street was undeveloped in 1802, it is more than likely that the houses Booth was inspecting were at the very tail end of their leases, pending reversion to Lady Somerset.

From the outset, Lord Somers approached his property matters a little differently to his contemporaries. Partly this seems to have been the influence of his agent, Nathaniel Kent (more at home on matters of agriculture than development it would seem), but also borne of circumstance. Where the Bedfords, Southamptons and Grosvenors (for example) were bedding down for the long term, in the late 1700s Somers was taking an alternative approach. Clarke’s research shows us there was no interest on the part of Lord Somers to invest, nor was there a particularly long term view adopted. Having failed to sell his farmland to the adjoining Bedford Estate (in part likely due to the apparently boggy conditions and proximity to various brick making and other industries) Somers’ main concern seem to be the extraction of a short term financial gain.

In Landlords to London, Jenkins quotes the author Donald Olsen who in his writings on the business of the Bedford and Foundling Estates notes that “The whole day to day business of an estate office would be unintelligible without the assumption that the first duty of the ground landlord was to pass on to succeeding generations the value of the property unimpaired and if possible enhanced.”

In a time before town planning legislation, this long term profit motive would steer the course of the development of much of London up until the early 19th century.

In the late 1700s, the Bedford Estate’s agent was a man named Robert Palmer who was largely responsible for the laying out of Bedford Square - among other schemes still visible today. A success from the start, Jenkins notes that the conditions imposed by Palmer on the contractors and builders went in to “mind boggling” detail. On the neighbouring Foundling Estate, James Burton (working under the close supervision of the Governors), also insisted on the careful use of materials and on phasing “so that each part may be complete in itself and not depend for its success…upon the execution of others”. Clarke also observes that the Duke of Bedford also made advances and investments in the development process in order that the work conformed to the standard required.

In this context of close supervision and attention to detail Somers couldn’t have been more indifferent to the development of his estate. The whole enterprise was essentially contracted out through a series of long leases to the only person to make him an offer for the land - architect, developer and local magistrate (i.e. building control officer of sorts) - Jacob Leroux.

Through his varied professional career Jacob Leroux would have been familiar with the schemes overseen by the likes of Palmer and Burton. Having also personally been involved with house-building on the nearby Southampton Estate he would also have been familiar with the general approach to development that Clarke observes as dating from the last third of the 17th century.

Clarke informs us that the general convention with regards to housebuilding in the late 17th century, and for a couple of hundred years thereafter, would be that a developer would take on a 99-year lease of land in return for a fixed rent payable to the freeholder. This rent would be an improvement on the existing use value of the land (usually agriculture or brick making) but on a wholly unconditional basis. The landlords of the time were taking no risk in this process. After an initial two years’ peppercorn, improved rents would be payable – come rain or shine.

The developer (head leaseholder) would be responsible for the investment in infrastructure and then the sub-letting of house-building leases, in return for an initial premium and enhanced rates, to reflect the improvements made in the land. In this way, the developer would be seeking to recoup his initial investment and create a profit rent. But in doing so assume a very large amount of risk. Generally the actual house-builders were ‘artisans’ who only had the capacity to take on a handful of units at a time. Any softening in the house-building market would therefore greatly affect the head-lessee who was by then obliged to be making ground rent payments to the freeholder and servicing the cost of finance and infrastructure.

At the end of the terms, the leases would terminate and interests would revert to the freeholders.

Given this method, Clarke notes that the degree of control exercised over building by either the freeholder or head-lessee varied considerably. This control could range from just the size of the building plots all the way through to the materials and form of construction and eventual occupation. The Bedford Estate went to considerable pains to maintain control over both the form and function of their Estate. This extended to making investment in infrastructure and extending loans to some of the developers to ensure a high quality product. There were also famously enforced controls over the access to the newly developed estate by tradesmen, for example. This sharing of some risk and a clear vision for the long term management is very much to theirs and Palmer’s credit. Much of the estate still exists as designed.

In the case of Brill Farm, Clarke has reviewed the original 1788 agreement between Somers and Leroux. Apart from placing obligations on the delivery of certain infrastructure items, the most significant form of control during development was the stipulation that Leroux was to spend not less than £400 [c.£55,000 in 2015 prices] on the construction of each house, with eight houses of not less than £850. Such stipulations failed to acknowledge the risk of inflation (which ran at an average of 5% a year to 1800) and it also wholly failed to recognise the contractual mechanisms for delivery – meaning that the condition was all but impossible to test. It is also noteworthy that Somers was contracting with Leroux for all future management of the estate – requiring Leroux to keep “…all ways, passages, lights, casements, water courses…brick walls and fences, pavements, sewers and drains…in good repair”.

In general, one can understand why Somers might have backed Leroux. He was an upstanding member of the local community and had experience of development. But one of Somers’ problems seems to have been the lack of commercial tension when dealing with Leroux. Whether Leroux used his local influence to ward off competitors, or whether the land was just too unattractive, Leroux was the only show in town for Somers. He was the only person who offered to take on the development project. Perhaps acknowledging this and perhaps seeking to maintain a degree of control Somers had broken the estate in to plots which, when drawn down, came with their own infrastructure conditions. This may have seemed like good business for both parties at the time but in granting these interests to Leroux, Somers – via his agent Kent, had created plots of land which were legally distinct. When Leroux died in 1799 he instructed that his long leases at Somers Town be auctioned off and the proceeds divided between his surviving family. The leases were duly broken up and sold and all prospect of centralised estate management collapsed.

With the march of inflation eroding the value of the freeholder’s income, and the motivation to invest in the upkeep of the houses dwindling along with the remaining terms, it seems inevitable that these conditions would conspire to dissuade investment in the Estate during the 1800s. Without an effective management regime, few remedies in the hands of the freeholder and fractured long -lease interests it is no wonder then that Booth was presented with such decay at the end of the century and looking for answers.

It is impossible to isolate the deals between Somers and Leroux as the sole cause of the decline of Somers Town. The coming of the railways and the original setting of the site also had huge impacts here. But it is certainly possible to look at Somers Town and read the lessons for today’s developers. Some of the advances in the law of property and the increased sophistication of the development industry have recognised a number of these. But equally, the benefits of adopting a long term view, the sharing of risk an reward between stakeholders, and the need for a robust management regime should be key considerations for all landowners considering large scale development and regeneration schemes.

Paul Clark

CAMPKIN, B., Remaking London: Decline and Regeneration in urban culture, I.B. Tauris, London, 2013

CLARKE, L., Building Capitalism: Historical change and the labour process in the production of the built environment, Routledge, Oxford, 1992

JENKINS, S., Landlords to London: The story of a capital and its growth, Constable & Co, London. 1975

TINDALL, G., The fields beneath, Paladin, London, 1980