Latest newsKeeping up to date with the latest news on estate regeneration in London.
August 2021 Bulletin
St Raphael’s estate - saved from demolition
Brent Council has finally come to its senses and decided not to proceed with demolition of the St Raphael’s estate in Neasden.
In a letter recently circulated by the leader of Brent Council, residents were told that “the redevelopment option is no longer affordable at this point in time” and that the planned ballot would no longer go ahead. Instead Brent Council said it will be pursuing an in-fill option to provide extra council homes on the estate.
A December 2019 Cabinet report had already acknowledged that the proposed scheme suffered from a £22m viability gap. Brent Council deserves some credit for calling time on this scheme, although it’s not clear why it didn’t do so earlier.
Estate redevelopment is rarely viable but Councils often plough on nonetheless, plugging funding gaps with its own scarce resources. We pointed out last year that Kingston Council is stumping up nearly £200m to plug the viability gap in its regeneration of the Cambridge Road estate, along with £60m of Mayoral funding. In June we reported that Westminster Council was stumping up £198m to plug the viability gap in its redevelopment of the Ebury Bridge estate.
Southwark Council is coughing up £138m to see through just the first phase of its Aylesbury estate redevelopment (not including leaseholder buyback costs, demolition or tenant rehousing costs), as well as £54m in Mayoral grant funding.
Hopefully other Councils will start coming to their senses and follow Brent’s lead in realising the growing economic, social and environmental advantages of refurbishment.
The rats, leaks and collapsed ceilings found in the ITV report led to an inquiry by the Social Housing Regulator. But in August that inquiry cleared Clarion of any wrongdoing, finding no evidence of “organisational failure.”
It has since emerged that not a single tenant was spoken to or property inspected by the Regulator as part of the inquiry.
It also turns out that the Regulator waived the ‘Decent Homes Standard’ upon Clarion’s request on the Eastfields estate in 2014, meaning housing conditions were allowed to fall below basic legal requirements a long time ago.
Ownership of the Estate was acquired by Circle Housing Group in 2010 as part of Stock Transfer Agreement containing all of Merton’s council housing stock, totalling circa 9,500 homes.
The stock transfer agreement committed Circle to improving the quality of accommodation to at least Decent Homes Standard by 2015. Circle then became Clarion after its merger with Affinity Sutton and decided in 2016 to demolish instead of improve the estate, following an options appraisal assessment carried out by Savills.
The Mayor then approved £15m grant funding for the Eastfields estate scheme in June 2017 and signed off outline planning permission for the scheme in November 2018, despite it not meeting with his minimum affordable housing requirements (30% instead of 50% affordable and affordable rent rather than social rent).
The outline planning consent said that the scheme would be progressed in five phases over a 13-year period, each of the five phases requiring a detailed (reserved matters) planning application to be submitted. In Clarion’s most recent newsletter to tenants (Spring 2020) it said that submission of the detailed application for phase 1 had been delayed because it was “still reviewing our regeneration projects and costs, so we are not yet in the position to submit the planning application.”
No further information is available surrounding the ongoing and extensive delays. Clarion hasn’t even drawn up a roadmap for decanting the estate. Clarion’s outline permission expires in April and the GLA grant funding requires a start on site by March next year. If Clarion doesn’t submit and get a reserved matters approved by then it runs the risk of losing grant funding and also its ballot exemption (albeit at the Mayor’s discretion).
Thamesmead estate (East) - plans submitted involve net loss of social rent
Peabody has submitted its plans for the demolition of 596 homes on the Thamesmead estate (East) in Bexley.
Peabody wants to triple the density, replacing the estate with 1,950 new homes of which just 61 social rent. A further 307 homes will be (London) affordable rent and 279 shared ownership, the remainder private for sale units.
There is nothing in the application to explain why it fails to comply with the Mayor’s policy requirement of 50% affordable housing and no net loss of social rented homes.
Neither is there any explanation as to how the scheme complies with the Mayor’s requirement that alternatives to demolition have been explored and demolition is being pursued as a last resort.
Peabody has submitted a financial viability assessment explaining that it can’t provide more social or affordable housing because the scheme is not viable. In its calculations Peabody has included a 16% profit margin (amounting to £110m) as a cost to the scheme, which it says is the minimum profit it requires - despite it being a non-profit charitable trust rather than a developer.
We reported last year that the Mayor’s next round of grant funding excludes funding for replacement affordable homes, only additional affordable homes will qualify.
This is one of the first schemes which appears to be affected by that. The viability assessment explicitly acknowledges this. It will be interesting to see what the Mayor’s stage 1 response to the planning application will look like - i.e. whether he will allow his change in grant funding rules, to be used in justifying failures to meet his basic affordable housing requirements for estate regeneration. Or whether he will insist that Peabody uses its £110m profit margin to improve its affordable housing offer. Watch this space!
High Lane estate plans approved with net loss of 71 social rented homes
Ealing’s planning committee has approved its development partner Rydon’s application for the demolition of the High Lane estate in Hanwell. The plans propose the construction of 505 new homes of which just 142 social rent, whilst a further 75 will be set at London Affordable Rent levels.
As continues to be the case with ongoing estate redevelopment applications, the Mayor’s minimum policy requirements are being routinely ignored. The Mayor’s supposed no net loss of social rent requirement, the 50% affordable housing requirement, the requirement to explore alternatives to demolition, have all been completely ignored, as well as the Mayor’s requirement to publish the viability assessment explaining with the affordable housing offer falls short of the policy quota.
The application is yet to be signed off by the Mayor so it remains within his power to ‘call it in’ for further scrutiny. Given that Ealing Council is a Labour-controlled Council this remains very unlikely.
Waterloo Road estate - plans approved with net loss of 2 social rented homes
Havering’s planning committee has narrowly approved plans for the redevelopment of the Waterloo Road estate, allowing the demolition of the estate’s 290 existing homes (214 of which council homes and 76 leasehold) and replacement with 1,380 new homes. Despite quadrupling the density of the site only 212 of the new homes will be social rented tenure.
The application does also secure 197 homes at (London) affordable rent and 147 shared ownership, while the remaining 844 homes will all be private for-sale units.
The viability assessment submitted for the scheme, says that it cannot provide more social rented homes or meet the Mayor’s 50% affordable housing requirement because the scheme is not viable. - i.e. the scheme only provides 6% profit for Wates (Havering’s development partner) and not the 14% the viability assessment says that it requires.
The viability assessment also shows that the Mayor is providing £18.5m grant funding to the Council and its development partner for the redevelopment of the estate and that Havering Council has spent over £15m decanting the estate (para 7.15). There is nothing in the planning application explaining how the scheme complies with the Mayor’s policy requirement that demolition is being pursued as a last resort and no cost/benefit analysis to show that the £33.5m in public funds couldn’t have been better spent on refurbishment or in-fill development.
Havering’s re-housing offer for leaseholders displaced by their schemes is by far one of the poorest in comparison with other London boroughs.
It makes no provision for the gap between the value leaesholders receive for their current homes and the cost of the replacement new-builds. It simply gives them ‘first refusal’ on the purchase of a new home - if they can afford it or they can apply for one of the shared ownership homes once they have been built (and pay rent on the unowned share like other shared owners).
The re-housing offer for tenants is not much better. There is no guarantee of a tenancy in one of the replacement social/affordable homes or a right to return. The only guarantee is two direct offers of a tenancy in a home on an estate elsewhere in the borough, albeit selected by the Council.
The Waterloo road scheme is a good example of how the offer to residents on estates exempted by the Mayor from his ballot requirement, is inferior to those subject to ballots. It is difficult to believe that, had they been asked, residents of the Waterloo Road estate would have voted for demolition based on Havering’s poor re-housing offer to residents.
More ballots approved - refurbishment option absent from ballot papers
Three more estates have voted in favour of redevelopment versus ongoing managed disinvestment. These include the Calverley Close estate in Lewisham, the Barkantine estate in Tower Hamlets and the Wendling estate in Camden.
As usual, residents were given two stark alternatives; they could either vote for redevelopment with its incentives of secure tenancies for temporary tenants (which always make up a large proportion of estates earmarked for demolition) and homes with extra bedrooms for overoccupying secure tenants, or the choice of a continued ongoing, managed disinvestment and decline in the condition of their estates. The Wendling estate’s Landlord Offer ahead of the ballot makes it clear that if residents vote against demolition, the Council has no immediate plans to resolve the estate’s ongoing maintenance issues. As has become common practice in estate regeneration ballots - refurbishment is not an option on the ballot paper.
Camden’s pre-ballot information booklets go as far as saying that if residents voted against demolition, then it would be 2025 before the Council would even ‘consider’ resuming cyclical maintenance works and that they would be ‘considered against Camden’s other priorities’ at that time.
Residents have long since been reporting issues concerning the lack of maintenance on the estate, with the TRA claiming that the Council has given up on basic maintenance and repairs because the estate is earmarked for redevelopment:
Estate Watch zoom meeting
July’s Estate Watch zoom meeting was well attended, with representatives from around a dozen estates under threat sharing their experiences.
The date of the next Zoom meeting is yet to be confirmed.
Please email email@example.com to request attendance and further details.