In the 1860s there was growing pressure to clear the slums of London. This was partly out of concern for the poor themselves, but it was also because slums were seen as hot beds of disease crime and immorality.
Public authorities were given powers to demolish properties by the Torrens Act of 1868. In 1875 Disraeli’s government passed the Artisans and Labourers Dwellings Improvement Act which allowed the City Commissioners of Sewers and the Metropolitan Board of Works to demolish slum properties and sell the land to ‘model dwellings companies’ who would then build accommodation for the same number of working people as had been evicted from the slum dwellings.
Model dwellings companies were housing charities which operated on a commercial basis by raising money by appealing to wealthy people’s charitable instincts as well as to their business instincts – a bit like environmentally sound companies of today – and they would use the money to build housing for the poor. They guaranteed a 5% return on the money invested. There were about 30 of such companies building in London in the latter part of the century.
These charities provided housing to the poor who were above the totally destitute because they had to pay that 5% return on the money invested; and that meant that tenants had to be able to pay rent once they were in their new homes. This was not commercial rent, but it was enough rent to make it impossible for people on the streets and out of work to benefit from these new housing schemes. One of the main model dwellings companies wrote that its aim was to rescue respectable working families so as to ‘leave more room for the second and third classes who were below them’.
The Peabody Donation Fund, founded in 1862, operated on a slightly different basis. The money had all been contributed by George Peabody (originally £150,000 and later an additional £500,000). The Peabody Donation Fund was aiming to assist poor people, but the trustees still took this to mean people who were respectable and in work, rather than complete down and outs. But because they didn’t have to pay dividends of 5%, they could charge lower rents and so help the worse off. Peabody was able to undercut the rents which the other charitable companies charged considerably. In fact, the other companies complained that it made it impossible for them to improve their properties and fund the improvements by putting up rents.
Click here to read a short biography of George Peabody.
The Peabody trust had rules to protect the standards it was imposing on its tenants. Everyone had to be vaccinated against smallpox. Everyone had to take turns cleaning the lavatories (which were shared, not in individual properties), and passageways and other common parts.
The Peabody Donation Fund changed its name to The Peabody Trust in 1948.
Peabody now owns more than 19,000 homes in London. It only operates in London. Peabody is governed by 10 board members. They come from a wide range of backgrounds. Up to two board members can be residents. The board meets six times a year. Day-to-day management is carried out by the Chief Executive and Executive Team. The entire operation is divided into four directorates, each with their own Executive Director who then reports to the Chief Executive of the group. Peabody is a registered charity and it is a housing association.