London mayor blasts council over cut to affordable homes in Battersea revamp

Sadiq Khan says developer’s revised plan that reduces low-cost housing in historic power station scheme was ‘waved through’ by Wandsworth

One of Britain’s most famous landmarks is at the centre of a conflict between the mayor of London, an embattled local authority and a Malaysian-led property consortium over plans to slash the number of affordable homes in the capital’s biggest building project.

Sadiq Khan has accused Wandsworth council of “waving through” a developer’s request to slash affordable housing at Battersea Power Station in south London. The council caused an outcry last month when it rubber-stamped a move by the developer driving the £9bn revamp of the historic site that cut the number of affordable flats to 386, a 40% reduction from original plans.

Citing rising costs and other factors, including Brexit-induced economic uncertainty, which has disrupted the luxury homes market, the developers say they expect to achieve less than half of the original returns. However, the project headed by a Malaysian-led consortium is on course to make profits of £1.8bn, according to records released by Tory-led Wandsworth.

“If these numbers are accurate, they seem to suggest that the council have had the wool pulled over their eyes – allowing themselves to be hoodwinked into cutting affordable housing while the developer’s profits remain strong,” Khan told the Observer.

The mayor said that his own planners had asked Wandsworth for records detailing the viability of the scheme when he first heard about the developer’s request to make the cut.

“However, the council failed to provide us with this information before deciding to send the application to planning committee for decision. I urgently wrote to the committee urging them to defer the decision until my recently appointed expert viability team had challenged the numbers, but my concerns fell on deaf ears and Wandsworth waved this shameful decision through.

“Londoners will therefore be rightly suspicious of the speed in which Wandsworth council rushed through the decision. I will continue to do everything within my power to get a grip on developers who unscrupulously navigate the viability system to try to boost their bottom line at the expense of building more affordable homes for Londoners.”

The row has intensified as previously confidential documents regarding the development – obtained by the Observer under the Freedom of Information Act – show how councillors have ignored planning guidance and in effect negotiated away thousands of affordable homes to help support the profits of developers.

Appraisals by banking group BNP Paribas for Wandsworth council show how the original developer of the site, Treasury Holdings, hugely overpaid for the land and as a result sought to build a lower level of affordable housing, to which the council agreed. BNP Paribas stated in the appraisal that the development should be able to provide as much as 50% of affordable housing if planning guidelines had been applied.

While celebrities including Sting and Bear Grylls are among those who have already bought luxury units in the development, the application from the developers to slash the affordable housing came as a shock to nearby residents, first-time buyers, renters and local people promised a 40% discount on the average market rent.

Under the proposals, affordable homes now amount to only 9% of the 4,239 homes, which include luxury units ranging from £800,000 for a studio to £4m for a four-bedroom flat.

Neil Crosby, professor of real estate at the University of Reading, said the controversy was a reflection of a system that completely stacked the process in the favour of developers. “It enables developers to offset some of the risks and pass them to the local planning authority,” he said.

Siân Berry, chair of the London assembly’s housing committee, said that Battersea was the latest mega-development that had cut back on social and affordable housing after planning agreements were made.

“For this decision to have been made without proper public scrutiny is a disgrace when the average Londoner is being priced out of our city and the key purpose of planning rules is to secure homes Londoners can afford,” she said. The Green London assembly member said that a new team of “viability experts” established by the mayor should be challenging such decisions.


Ben Quinn and George Turner

The GuardianTramp

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