London council pulls plans for four ‘unviable’ housing projects
A London council has pulled plans for four “unviable” developments amid challenging economic conditions and a housing market downturn.
The decision by Ealing Council reduces its planned pipeline by 64% overall, from 1,003 homes to 358. However, the local authority said it is not reducing investment and instead working to bring forward other more deliverable schemes.
The unviable projects, which all have grant allocation within the Greater London Authority’s (GLA) Affordable Homes Programme (AHP) for 2021-26, include Stanhope School, Neville Close, Shillaker Court and the fourth phase of the Golf Links Estate.
As it stands, the reduced programme now includes 179 social rent homes, down from 557 – a reduction of 68%.
The details emerged in a report on housing delivery, which went before cabinet last week.
According to the document: “With a continuing downturn in the housing market, Beacon Partnership were commissioned by the council to reappraise all AHP 2021-26 projects during Q3 2023 using revised financial assumptions and hurdles.
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“The exercise resulted in several projects being deemed currently unviable.
“Stanhope School, Neville Close, Shillaker Court, and Golf Links Phase 4 fail to meet the required financial hurdles.
“Measures taken to improve viability and an assessment of the potential for partnerships and alternative delivery routes failed in creating proposals which met financial expectations.”
Ealing Council had plans to build on Stanhope School’s site after it was relocated.
But the report said the school received Department for Education funding toward its rebuild and the education secretary is “considered unlikely to approve the release of education land for housing”.
In June 2023, Ealing’s housing development team met with residents of Neville Close and Shillaker Court to discuss the potential redevelopment. However, in both cases, most residents were happy with the condition of the blocks and wished to remain.
“Furthermore, a resident ballot is required at Neville Close due to there being general needs housing on the estate and the timescale required for this would prohibit a start on site by March 2026, even if a positive outcome were considered likely,” the report said.
Following a “more accurate estimate” of the cost of buy-backs and securing vacant possession, the fourth phase of the Golf Links Estate is now considered unviable.
The report said that “considering the issues, it’s recommended that replacement projects are sought for the unviable projects in the AHP programme” and that “alternative viable options are explored”.
Ealing Council is also seeking to renegotiate current grant allocations for existing projects to “reflect changes in tenure and economic challenges and to ensure proposals meet the required financial hurdles”. It is also looking to “reallocate unused grant” for new projects.
The local authority has committed to start building 4,000 new “genuinely affordable homes” by April 2026. The target is highlighted as a risk in the council report.
“With a reduced programme and RPs [registered providers] and developers cutting back or pausing their own programmes the risk of not achieving the corporate target is high.
“This is being mitigated through an increased focus on partnership working and adopting new initiatives and delivery models,” according to the report.
An Ealing Council spokesperson said: “The council is carefully reviewing all projects within its housing delivery programme in light of the economic climate and housing market downturn.
“The council is drawing on the other projects within its delivery pipeline in order to meet our ambitious target for new genuinely affordable homes.
“The council team is working closely with the GLA.”
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