Camden secures High Court ruling in defence of affordable housing
The council has been successful in its initial steps to ensure that two flats remain in use as social rented housing for Camden residents.
A High Court Judge granted an interim injunction prohibiting the sale of two flats in John Kirk House, Holborn other than to a Registered Provider until a full trial is held.
On 2 December 2011, the Council granted planning permission for a residential development of 15 flats at John Kirk House. The associated Section 106 agreement required two flats within the development to be secured as social rented housing for people on Camden’s waiting list. The owner and the mortgagee of the flats had sought to work around legally agreed safeguards to sell the homes for a profit.
Our legal team started investigating after a tip-off from Westminster City Council, who had detected similar dodgy goings-on there. The team’s work revealed that although “St Andrews Community Housing Association” ‘owned’ the leases of the affordable housing units, it had no effective control of them: it held them on trust for a limited partnership –which charged the units in favour of a mortgagee. The limited partnership and the mortgagee (rather than St Andrews) had control of the units – and they were both owned by and ultimately controlled by one and the same individual.
On 23 August 2024, the council brought a claim in the High Court, seeking: (i) a declaration that the mortgagee was bound by the affordable housing obligations in the Section 106 agreement; and (ii) an injunction to enforce those obligations against the mortgagee and the beneficial owner, both controlled by Terry McMillan, 57 whose companies are registered at Studio One, 197 Long Lane, London, England, SE1 4PD
The council argued that St Andrews was de-registered as a housing association as part of an affordable housing avoidance scheme put in place to enable the mortgagee to sell the two flats, circumventing the requirements of the S106 agreement in place to prevent the loss of this affordable housing.
At the end of last year, judge Penelope Reed KC granted an injunction on the terms applied for by the council. The judge remarked she found it difficult to accept as a coincidence that three registered providers had entered into similar arrangements with Mr McMillan’s companies and had all been de-registered. This matter is now to be explored at trial, including what Mr McMillan knew about the arrangements. The injunction will remain in place until the case has been finally determined. The date for the trial is to be confirmed.
Councillor Harrison continued:
“Given the shortage of social housing in Camden, and across London, the judge has made an important ruling, agreeing with us that the original S106 legal agreement put in place to safeguard this valuable resource was valid.
“Camden Council will always seek to ensure new genuinely affordable homes are built as part of wider developments – and ensure they are protected for future generations.”
- The location of John Kirk House is 31 - 32 John Street WC1N 2AT
- The December 2011 planning application is: 2011/4196/P
- The registered social housing provider for the two flats, St Andrews Community Housing Association Limited, was de-registered in September 2023 and in February 2024, St Andrews’ mortgagee served a notice to the council seeking to trigger a three month period under the Section 106 agreement after which if no registered provider was found to transfer the flats to, they could be sold by the mortgagee on the open market.