A £1bn build-to-rent project of four- to 28-storey apartment blocks in south London is in deadlock as the local council battles the developer to ensure more affordable flats are made available.
Like developments built for sale, councils can require build-to-rent projects to have a minimum number of units at an “affordable” rent, meaning they are let at a minimum of 25% below the standard market rent.
In Bermondsey, south-east London, the Duke of Westminster’s property group, Grosvenor, faces rejection for its 1,343-flats scheme as Southwark council says it does not comply with its affordable housing policy.
The proposed scheme, a mix of rentals, ranging from studios to three-bedroom flats for families and sharers, will have 27.5% affordable housing. But Southwark council’s target is 35%, with an average 50% social discounted rent; the Greater London Authority’s (GLA) target is an average 40% discounted rent.
Grosvenor, owned by Britain’s youngest billionaire, Hugh Grosvenor, says it would charge an average £1,410 a month for a one-bedroom apartment, affordable for a couple each earning £30,000 a year. Rents for a three-bed would average £2,260 – affordable, it says, for three sharers who each earn £30,000.
Southwark councillor Johnson Situ says: “With over 10,000 people on our housing waiting list it is very disappointing to see such a little amount of social or genuinely affordable housing in this application. As it stands, we are still a long way from agreeing a scheme that meets the council’s policies.”
Grosvenor argues that on the proposals it submitted a year ago, it would break even only 20 years after completion. To satisfy Southwark’s affordable housing requirements it would have to spend another £100m, which the property group argues is not financially viable.
Simon Harding-Roots, the head of major projects at Grosvenor, says the flats, on the site of an old biscuit factory, would be affordable for “the forgotten middle – the nurses, teachers and police, who are often on shift work, can’t afford to buy and are not eligible for social rented housing, and are having to move out of London”.
It is understood that Southwark council’s planning officers will make a recommendation for refusal in a report before a planning committee meeting in coming weeks. If the committee rejects the scheme, it would be referred to the GLA for a final decision.
The GLA declined to comment.
