Building the boroughs: council-led construction boom to bring 25,000 new homes to London in next five years

Social mobility is at the heart of a new government Green Paper, published yesterday, which pledges to give council tenants the chance to springboard into home ownership.

The paper’s authors say no tenant should feel stigmatised as a council renter and suggest allowing tenants to buy as little as one per cent of their home each year to begin home ownership.

The plans have been criticised for failing to find extra funding but they come at a time when many London councils have started to look at new ways to provide more homes.

The capital needs to build 200,000 homes to keep up with its burgeoning population, yet last year managed to complete just 27,000, falling far short of Mayor Sadiq Khan’s target of at least 66,000 a year.

However, plans laid out by 22 of the 32 boroughs are set to give the capital 25,000 new homes over the next five years. That compares with the measly 2,100 homes built by councils over the past seven years.

Ambitious councils have broken away from their traditional role as purely social housing providers to deliver a wider range of properties, either by building homes themselves or creating “arm’s length” firms to build and sell homes that feed all profits back into the locality.

The public sector will continue to sell off land to private development corporations for much-needed cash, but a report from the think tank Centre for London has analysed each borough by the pipeline of homes it plans to deliver, either itself or via a subsidiary, and found that the councils are enthusiastic about getting back into housebuilding.

The busiest are named as Newham, Hackney, Croydon, Southwark and Barking & Dagenham.

“This resurgence of interest is driven by an increasing awareness of the urgency of London’s housing challenges, as well as a desire to take more control of housing delivery and potentially to generate revenues when finances are lean,” says Richard Brown, Centre for London’s director of research.

The number of new homes to be built by councils in the next five years:

Only last month newly elected Haringey council members scrapped a £4 billion property deal with the global developer Lendlease that would have delivered 6,400 homes over 20 years, transforming the Broadwater Farm and Northumberland Park estates. “The council members were concerned that they would be surrendering too much control to Lendlease,” an industry expert told Homes & Property.

However, property consultant JLL’s Adam Challis warns that councillors must enter the challenging world of housebuilding fully conscious of all the risks. “In the past, local authorities were let down by private developers in getting schemes built that met the needs of the local people and this has motivated councils to create a new breed of council-led building firms,” he says. “But there are negatives.”

Challis cites the Haringey-Lendlease saga: “In pulling away from Lendlease the council has accepted full responsibility for housebuilding in their area and when things get inevitably delayed, and the snagging has to be done, they will have to cope with the complaints from a disappointed public. The ugly and difficult issues will now land on their doorstep.”

NEWHAM

Newham council in east London set up its arm’s length development company in 2014 and since then it has delivered three schemes of affordable rental homes. It has pledged the largest number of homes to be delivered by any council directly at 1,000, with 3,000 by its development firm Red Door Ventures, in the next five years.

Future schemes include affordable rental, shared ownership and private rent. One-and two-bedroom apartments are available at Cheviot House in Commercial Road, Whitechapel.

The Art Deco former council office now houses 97 apartments — the cheapest available is a ground-floor, one-bedroom flat for £1,250 per calendar month.

BARKING & DAGENHAM

Be First, the development firm of Barking & Dagenham council, is proposing a £2 million redevelopment of downtrodden Barking town centre into what is being nicknamed “a mini Manhattan”.

The new-look district will include 6,000 new homes over 10 years, along with shops and an art house cinema.

During the next five years Be First will be directly responsible for the construction of 2,000 units, and rents will be discounted on 40 per cent of these homes.

The 60-home Weavers Quarter in Barking has one and two-bedroom apartments to rent starting from £880 per calendar month, which is 20 per cent lower than the market rate. Tenants must sign a one-year introductory agreement but after that can commit to five years.

CROYDON

Brick by Brick was established in 2016 by the London borough of Croydon. Up to this point, Croydon was delivering just 16 per cent affordable housing but this has doubled to 32 per cent including private developer schemes, with Brick by Brick reaching 48 per cent.

“There was market failure here,” says Colm Lacey, chief executive of Brick by Brick. “New homes were not of the right quality or being built at the required rate.”

Brick by Brick specialises in building on small sites and Lacey stresses his aim is to deliver stylishly designed schemes that improve the look and perception of Croydon.

It has 43 sites in planning and is investing £30 million into the redevelopment of Fairfield Halls, the town’s old arts and conference centre.

Local people have the exclusive rights to buy Brick by Brick properties for two months when each scheme launches, with the first scheme due to go on sale next month.