Homebuilder steps back from proposals over rising projected costs
Josh Mellor, LDRS
- Credit: Archant
A council-owned housing company cannot afford to build any of the 489 new homes it was set up to do.
At a cabinet meeting this week, council leader Jas Athwal said the projects were no longer profitable after projected construction costs “shot up” over the course of the pandemic.
All three schemes were passed by the council’s planning committee but then rejected by the Greater London Authority (GLA) for not including enough affordable homes.
The council’s leadership has now agreed the authority will take over the proposals, all currently “under assessment” by planning officers, and increase funding for them from £70 million to £80m.
At the meeting on September 14, Cllr Athwal said: “We’ve explored all other options of delivery.
“With the onset of Brexit and labour hard to come by, and materials at such an extra cost, the best thing to look at now is the cheapest way to develop for residents, and that’s what we seek to do.”
Past proposals on all three sites were rejected by the GLA because less than half of the planned homes would have been affordable.
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In December 2019, the application for the company’s first scheme on Clements Road was described as “wholly unacceptable” for offering just 29 per cent affordable housing.
It proposed the construction of 94 flats in two blocks of nine and ten storeys, while the Loxford Lane development, if approved, would see 17 houses and four blocks to total 142 homes built on a former school and hostel site.
The biggest planned development, in Seven Kings, would see 236 homes built, with additional space for social enterprise and community use.
According to a council report, the total projected cost of Loxford Lane and Clements Road is estimated at £78.395m, with a further £1.605m needed to “bring a recommended scheme forward” at Seven Kings.
The report states: “The Loxford Lane scheme is expected to generate a surplus of £2.648m and Clements Road a deficit of £1.919m, and it is proposed to use the surplus from Loxford to cross-subsidise Clements Road leaving a net surplus of £0.729m.”
The report warns that even a one per cent inflation in the costs would have a significant impact.