Owners of squalid Dalston hostel rake in taxpayers’ cash to house homeless in shocking conditions

Some 2,900 families and single people are now without a home in the borough and are forced to live in temporary accommodation including hostels – 400 more than this time last year.

As the housing shortage in Hackney continues to deepen, some private hostel landlords are charging steep rents and raking in the profits.

The council paid £41million in 2016-17 to house people in temporary accommodation, £26m to private landlords.

At least £7m is likely to be going to hostel owners based on the average cost of a hostel room.

Above the busy Ridley Road market in fashionable Dalston is one hostel Hackney Council pays to house the homeless.

Its cell-like rooms have damp, peeling walls and its cramped corridors are lined with rodent poison.

Yet the private landlord that owns Ridley Villas was paid £700,000 of taxpayers’ money by Hackney Council last year. It also owns nearby Cape House hostel and other properties.

The Gazette went inside hostels to gather evidence of dismal conditions as we report on the thousands of hidden homeless living in the borough.

At Ridley Villas, we saw rubbish bags piled high near a fire-escape and out of order toilets.

We have been told of bed bugs in mattresses and even a knife stashed behind a door at the hostel.

Rooms there are among the worst examples of hostel provision the Gazette found – yet cost £192 a week.

Alex Armitage visited Ridley Villas when he was out canvassing for the local Green Party and was appalled by the conditions inside.

“Taking people off the streets, particularly in cold weather, has to be a priority,” he said. “But this isn’t that kind of place. This is a place people live for years and a private company is making a hell of a lot of money out of it.

“I’d say compulsorily purchase it and put in some proper investment so it’s dignified accommodation.”

A spokesman for the owner of Ridley Villas said it met all health and safety requirements and rooms are checked weekly.

Any weapons found are removed immediately and the police contacted, he said.

He stated the Victorian building – dating from 1873 – had issues with dampness to some walls due to its age. He said rodents were attracted because of its proximity to the market and said rubbish bags are removed daily.

“Ridley Villas has an excellent relationship with Hackney Council,” he said, “where housing benefit and temporary accommodation referrals are frequently made.”

But mayor of Hackney Philip Glanville said Ridley Villas was “very much a hostel of last resort”.

“I’ve always challenged the use of Ridley Villas. It is not somewhere the council is usually placing people,” he said. “I’ve had some recent complaints about Ridley Villas that I’m following up. We welcome the opportunity to take further action if those conditions are borne out.”

The man who has the largest shareholding in the company that owns Ridley Villas, property tycoon Henry Smith, is also chief exec and majority shareholder of developer Aitch Group.

Aitch Group’s prestigious projects include a sold-out development of 85 warehouse flats at the Textile Building, a mile away from Ridley Villas in Chatham Place, South Hackney, where two-bed flats sell for £650,000.

In a media interview last month, Mr Smith said Aitch Group had a turnover in excess of £150m last year, and the firm’s next big venture is developing 350 homes at Hackney Wick and Fish Island.

As developers profit from Hackney’s booming property market, the scale of the housing crisis deepens.

Some 784 households are now living in hostels in Hackney – more than twice the figure in any other London borough.

Meanwhile, 12,600 people are on the council’s waiting list for homes.

The mayor said Hackney would prefer not to use hostels but due to the scale of the housing crisis it was necessary.

“It is clearly a scandal that the regulations around private rents mean that you can charge that type of money for that type of accommodation,” he said.

“But that’s not something the council can change. That would require further regulations around rent control and quality of conditions, and those are the sorts of things we campaign on regularly.”

* The Gazette’s Hidden Homeless campaign is calling for urgent action to tackle the housing crisis in Hackney. Please pledge your support by signing our online form – it only takes a second.