The chief executive of the Royal Borough of Kensington and Chelsea told survivors of the Grenfell Tower disaster that the council had been behaving like “a property developer masquerading as a local authority”, MPs have been told.

Barry Quirk, who took over at the borough one week after the fire in June 2017, made the comment in a private meeting with Grenfell United, the survivors’ group, one of its leading members, Edward Daffarn, told the House of Commons housing select committee.

“Think about that,” Daffarn told the MPs. “They were property developers masquerading as a local authority. They failed to keep us safe because they had higher priorities – getting their hands on the land, this massive goldmine they had.”

The council said it accepted Daffarn’s remarks and agreed. It indicated its strategy has changed since the fire, which sparked the resignations of the leader and deputy leader, Nick Paget-Brown and Rock Feilding-Mellen, the latter of whom works as a property developer.

Kim Taylor-Smith, current deputy leader, said: “We know we have to change, to listen to our residents and to act on their wishes. We respect Ed Daffarn’s views … The new council has pledged to build new social homes in the borough and have also taken on private developers like Capco, who are building high-end flats in Earl’s Court, and have made them include more social homes in their developments.”

Daffarn also criticised the council’s evidence to the public inquiry into the disaster, which claimed 72 lives. He said it was not being honest about “the little cabal of senior councillors and senior council officers from housing, from corporate property and from planning who have decided to asset strip the whole of our community, sweat our public buildings, disregard the people that live there and force them from the land they were living on because it was a gold mine.”

The committee heard from residents’ leaders that a year after the fire the relationship between the Conservative-led council and residents was riven with mistrust, particularly over the process of rehousing. It also took evidence from Elizabeth Campbell, the leader of the council, and Quirk.

Quirk told the committee that several of the senior executives at the council have been changed, notably in the housing department.

Sixty-eight households from Grenfell Tower and the walkways below have yet to move into a temporary or permanent home, according to the latest figures.

Nineteen households have yet to accept any offer, although Campbell, said 18 of these cases were in hand. Quirk said errors had slowed down rehousing by up to three months.

Sophie Earnshaw, of the North Kensington Law Centre, told the MPs: “The level of mistrust between the council and survivors and residents is significant. In initial months there was a lot of pressure on survivors to make very important decisions about their housing and survivors felt under pressure to accept unsuitable offers. The council has improved to a certain extent but residents do still feel that pressure.”

She said the council bought 100 properties soon after the fire that disregarded the needs of survivors, with some in high-rise buildings.

Jacqui Haynes, from the Lancaster West Residents’ Association, which represents residents in the wider area, said the problem with rehousing them was similar to those of Grenfell itself. Of the 127 Lancaster West residents only 39 have moved into a permanent home.

“They are being given one offer that they have to take,” Haynes said of some residents. “Some of the policies that surround their tenancy effectively mean they feel they are being forced to move out when they are unsure or uncertain. This is years of disempowerment and years of being looked upon as if we don’t matter and it is something that has cascaded.

“We have been suffering this sort of treatment for years and decades and it has been OK. It was just the fact that this disaster happened that everything blew up into the air and we can see this cannot continue. We don’t trust them and possibly that won’t happen for years.”

Campbell said: “Each household will come to a different decision. We hope that some of them will return home”. If they don’t they will be given high priority in bidding for other homes, she said.

Quirk told the committee that the council had addressed the rehousing challenge early on “without genuinely appreciating the depth of grief and despair”. He said the council had made housing its priority, but it should have been the humanitarian response. The council has bought 320 properties for rehousing in all.

Daffarn told the committee that some of the properties had not had fire risk assessments carried out.

“Residents weren’t informed of that when they were viewing and choosing,” he said. “Examples like that show the way that we feel we are not being treated with the respect we deserve. Even if they didn’t have the fire safety certificates, they should have informed us these properties would have to undergo further tests.”

Campbell denied the council had shown indifference. “We absolutely do care,” she said. “People have been in hotels a long time, but it’s complicated. We have worked extremely hard to build that [trust].”