In the heart of Chelsea, not far from Kings Road, more than 150 social housing flats stand empty on an estate set up over a century ago by the philanthropist William Sutton to house “the poor of London and other towns”. The four red-brick blocks, part of the Sutton estate, are at the centre of a long-running battle between local residents and England’s largest housing association, Clarion Group. This dispute has intensified in the aftermath of the Grenfell fire in the same borough.

Clarion, which owns the Edwardian estate, believes the flats in four red-brick mansion blocks are no longer fit for purpose. It wants to demolish the entire estate of 462 flats, spread across 15 blocks, and rebuild 343 flats with 237 for social rent and 106 for sale on the private market, some with multimillion-pound price tags. Last November, the London borough of Kensington and Chelsea rejected the application to demolish the Edwardian estate because it did not include enough replacement social housing. But the day before the Grenfell fire, the government’s planning inspectorate received an appeal against the refusal from the housing association, signalling its intention to press ahead with the lucrative development. A public inquiry into the appeal is due to start in May 2018.

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The decision provoked Robert Atkinson, leader of the borough’s Labour councillors, to write to Sajid Javid, communities and local government secretary, calling on the government to “take control of the [Sutton] estate from its rogue owners”. He argued that the Grenfell tragedy, which has left 150 households in temporary accommodation, has made addressing the local shortage of social housing an urgent necessity. “I am not suggesting that the Grenfell families could be moved en masse to Chelsea [but] certainly this estate could be used to alleviate the housing needs of others in the borough,” the letter says. Speaking to the Guardian this week, Atkinson says: “Clarion has emptied the Sutton Estate cynically and on purpose, so that they can cash in,” he says. “They see the estate as being their financial salvation. It’s disgusting.”

A Clarion Group spokesman describes Atkinson’s comments as nonsense. He says the plans were “designed to secure the future of social housing in Chelsea and provide our residents with good quality new homes … by replacing what is now outdated and difficult to maintain accommodation with poor amenities.” He adds that the housing association offered permanent housing to Grenfell residents both within Kensington and Chelsea and in the outer London borough of Bromley, but these were declined due to their distance from the tower and because the survivors wished to remain within their existing community. “If required, we would also consider providing temporary accommodation at our Sutton estate in Chelsea, where we have empty homes that are not deemed fit by RBKC to be let as social housing,” he says.

But the housing association’s offer has incensed campaigners against the Sutton estate redevelopment, who point out that Clarion has ripped sinks and toilets out of the flats in the four empty mansion blocks, leaving them unfit for habitation. The housing association says this was done for health and safety reasons and to prevent squatters using the buildings.

“To turn them into vandalised properties with as many people needing housing as there are is absolutely wicked,” says local resident and campaigner Lady Moya Denman. “When they [Clarion] were polishing their halos saying they were offering flats to Grenfell residents and they would redecorate them with their own money, nobody was asking why they were empty in the first place. And they were only offering eight and there were certainly a lot more in the perfectly good blocks.”

Two years ago, Jean Keal, who lived on the Sutton estate for more than 40 years, was rehoused from one of the four now empty blocks. “Our whole lives were being threatened. They were saying ‘if you do not choose one of the flats that have already been offered then we will go for eviction,”’ she says. “They were offering me flats on the top floors of [blocks] that have no lifts. It’s quite unforgivable to put so many people through that distress.”

Keal, who now lives in a one-bed flat in the borough, says the four blocks have been left “to go to rack and ruin”. Her son found towels and sheets she had left in the flat soaking wet when he went back to retrieve them two months later, while the metal work was rusting. She says the only way she and others survived was by organising to fight the housing association’s plans. “Good luck to the Grenfell people,” she says.

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But Clarion is not the only housing association with empty homes in the borough. It and five others were among hundreds of property owners identified by the council as having empty properties locally, following a freedom of information request by the Guardian. The six organisations, which also include Notting Hill Housing, Family Mosaic, Catalyst, Octavia Housing and Women’s Pioneer Housing Ltd, confirmed that they own 314 empty homes in the area, of which at least 178 have been vacant for six to 18 months.

The problem of empty housing association properties in Kensington and Chelsea is not new. The number of long-term vacant homes in the borough – those which are not available for immediate letting – more than doubled from 75 to 177 between 2005 and 2016, according to the Department for Communities and Local Government.

But the problem is not confined to London. One of the largest increases in vacant homes outside London was in Durham, where the number of long-term empty properties rose from 152 in 2009 to 453 last year. In Swale borough council in Kent, the number rose from 36 in 2005 to 101 last year, reflecting a rise across the whole of the county from 119 to 318 over the same period. In Stratford-upon-Avon, the figure rose from 16 to 79, and in East Hertfordshire the number of vacant properties rose from 22 to 70.

Yet other areas have managed to cut the number of empty housing association homes. Over the same period, the number of long-term empty housing association properties has fallen significantly across England, from 19,590 to 11,462. The number fell from 1,445 to 476 in Liverpool; from 674 to 194 in Manchester, and from 286 to 72 in Birmingham. In London, nly the much poorer boroughs of Lambeth and Tower Hamlets had significant increases in long-term vacancies, from 134 to 372 and from 120 to 313 respectively.

Facebook Twitter Pinterest Until the Grenfell fire, Kensington and Chelsea was one of the richest local authorities in the country. Photograph: Rick Findler/PA

So what is the reason for the level of empty housing association properties in Kensington and Chelsea, which until the Grenfell fire was one of the richest local authorities in the country? According to a council spokeswoman, some are empty because “they are due to undergo redevelopment to bring them up to a higher standard”, which “in many cases … is a lengthy and complex process.”

Many more are empty because they are being offered as temporary accommodation for Grenfell survivors, she says. Notting Hill Housing says 24 of its 46 empty properties in the borough are being held back for former Grenfell residents, while Women’s Pioneer Housing Ltd, says some of its 20 vacant properties were offered as temporary accommodation but because they were studios or one-bed flats, “they were not useful” to the council. Catalyst Housing says it had offered to rehouse survivors in any of the 51 empty properties it could offer. Family Mosaic, which has around 30 vacant properties, says it has offered empty homes to the council but it was up to the local authority to decide whether they should be offered specifically to survivors. Octavia Hill, meanwhile, says all eight of its empty properties have been put forward to the council to offer to survivors. “Two of these properties have been accepted and will be occupied following some minor works,” a spokeswoman says.

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Liberal Democrat councillor Linda Wade says the growing number of empty properties can be explained by a shift to bigger, more corporate housing associations, which have lost sight of their original philanthropic purposes. Clarion was formed last year, following the merger of Affinity Sutton and Circle Housing. Meanwhile Notting Hill Housing recently announced a merger with Genesis Housing.

“It’s not just Clarion,” says Atkinson. “As housing associations have got bigger and have kept merging they seem to be turning themselves into property developers and quite openly say for every apartment we sell off in central London we can construct six in other parts of the country or further out of London. It’s not on.”

Wade also believes cuts to central government grants and subsidies for social housing have exacerbated the problem.

At the Liberal Democrat autumn conference this weekend, she tabled a motion on safe building standards for all homes. Wade says this should include central government funding for building and engineering works in high value areas to prevent them falling into disrepair and then being empty for long periods. She warns that without this extra investment many of the housing association homes in Kensington and Chelsea are potentially another Grenfell. She says: “What we’re looking at is buildings that have risk. The problem you can see when you go around a lot of those properties is the same issues [with Grenfell Tower] could easily apply.”

Housing consultant Steve Hilditch says housing associations have lost considerable income from the cuts to rents imposed by the government, despite also being expected to increase housebuilding. “This has probably had the effect of squeezing their investment in their current [housing] stock,” he says. “In places like Kensington and Chelsea, housing associations sell one-bedroom flats to give them more money to develop more housing, but outside the borough.”

Hilditch cautions that major redevelopments could skew the number of empty housing association properties. He says: “In the case of the Sutton estate, they are probably holding properties empty because they want to proceed with their redevelopment plan.”

Meanwhile, despite a clear commitment from Theresa May two days after the fire that everyone would be rehoused within three weeks, just two families who survived the disaster have moved into permanent new homes. With the remainder still scattered across London in 36 hotels, the empty housing association homes in Kensington and Chelsea will remain a political issue.

Horden: Selling off the numbered streets netted £2.8m for housing association

Facebook Twitter Pinterest Streets of terrace houses in Horden were sold off by Accent Housing Association. Photograph: Ian Forsyth/Getty Images

In Horden, a former mining village in County Durham, residents say they campaigned for years to get Accent housing association to maintain its oldest terrace houses – the “numbered streets”.

They claim the community was blighted after Accent withdrew a renovation programme on the properties and began to sell them off instead.

Pat Barnett, chairwoman of the Horden Colliery residents association, says: “Accent let their properties fall into a dreadful state of neglect. It became so bad that decent families moved out of the area, thus leaving more empty properties. In July 2015 [the housing association] had 144 empty properties and 74 tenanted properties, meanwhile Durham county council did nothing.

“The current problems within this area were not brought about by the residents but [by] Durham county council and Accent Housing. Both are guilty of neglect of their duties within the area. While collecting the rent and council tax from the tenants and the owner occupiers, they failed to reinvest any of these monies back into the area.”

Last year, Accent sold 166 properties in the village for a total of £2.8m, which it says was reinvested in other areas with a higher demand for social housing. A spokeswoman says: “To date, 242 of the houses with no demand for rent have been sold and a further four remain for sale.” She says it currently has 29 empty homes across the whole of County Durham, with two in Horden.

In a statement, the housing association says: “This decision was a reflection of the changing needs of this community which we continue to support,” the statement says. “Despite significant advertising and incentives to let them, we had no success. The cost of maintaining the empty properties was around £600,000 per annum.”

At the same time, Accent says it has seen increasing demand for homes for older people and those with health needs. “As a result, we have invested almost £9m in bungalows in these villages,” a spokeswoman says.

Councillor Kevin Shaw, Durham county council’s cabinet member for strategic housing, says the number of empty housing association properties in County Durham “has fluctuated in the last few years for a variety of reasons”.

He adds: “In order to ensure that social housing is meeting need and demand, registered providers are undertaking a range of investment and regeneration projects. Some properties are being sold, limited demolition is taking place and there is the usual turnover within the sector. Naturally these activities can lead to properties being empty for a period of time, but registered providers and ourselves are committed to bringing them back into use as quickly as possible.”