Difficulties for buy-to-let investors have been cited as a problem in building on the site of the old Albion pub in Woolwich

A developer with permission to build a 13-storey block on the site of an old pub near Woolwich Dockyard station has applied again for planning approval – for a building without any “affordable” housing at all.

Lakeview Estates has applied to Greenwich Council to build 51 flats with commercial space beneath them on the site of the former Albion pub, next to the Morris Walk Estate, which is now being boarded up ready for demolition.

In November 2016, Greenwich councillors approved plans for a 13-storey block and 40 flats, of which 11 would be for social rent and four would be for “intermediate” rent or shared ownership, making a total of 37.5% “affordable” housing.

Since then, developers have suggested building towers of 26 and 21 storeys on the site, which have been knocked back at early stages by Greenwich Council officials. Now Lakeview has returned with a new proposal, reworking the original scheme to squeeze in more flats and commercial space – with no mention at all of social or any other form of “affordable” housing.

A viability assessment published with the planning application claims that the 2016 scheme “is no longer considered to be viable” and would lose over £1.4 million – partly because of the market being less attractive to buy-to-let landlords.

It says: “In the period since permission for the Extant Scheme was granted, the general residential market in London has deteriorated. There is considerable market uncertainty driven largely by uncertainty over the UK’s forthcoming withdrawal from the European Union.

“The effect of this uncertainty has been compounded by changes to SDLT [stamp duty] and capital gains tax arrangements, which have proved unfavourable to the investor market which has driven the London development market over the past decade. As a result of these changes, developers are less able to rely on the buy-to-let investor market for sales. This has a negative impact not only on achievable sales values, but also cashflow due to the reduced amount of units which can be pre-sold.”

However, it says that the new scheme would also only lose slightly less money – £1.25 million – if it had to include the 35% “affordable” housing that Greenwich Council housing policy demands.

“Affordable” housing is notoriously vaguely defined, and is always presented on this website in inverted commas because some forms of it are simply not affordable for many people. In general, it covers social rent (about 50% of market rates; Greenwich Council rents have traditionally been lower), London Affordable Rent (a little more expensive than social rent), London Living Rent (about two-thirds of market rents), and shared ownership schemes. Funding is available to developers to include “affordable” housing in their buildings.

In what may be an attempt to obtain money to provide “affordable” housing in the 13-storey tower, Lakeview says it has prepared an alternative scheme that would provide just nine flats, which means it would not be liable to pay developer contributions to Greenwich Council. With a profit of £819,000, it would be a “reasonable approximation of a scheme that a rational developer would seek to deliver”, the assessment says.

The application for the Albion site may help explain some of the difficulties surrounding the Morris Walk Estate redevelopment, which surrounds the old pub. Greenwich Council had hoped this would be well under way by now, but it handed over all control to the private developer Lovell, which has delayed the start of construction work. Hoardings to close off the old estate ahead of demolition only started to go up earlier this month.

It also sheds a little light on the dealings between developers and council planning officers in preparing these applications. With Greenwich Council increasingly reliant on developer money for some of its core work, this will put pressure on the council to help the new version of the tower get approval.

Lakeview’s application is live on Greenwich Council’s planning website, though it may be some time – if ever – before it makes it to councillors.

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