Greenwich Council shells out £87m on new homes from developers — including controversial Woolwich block

Greenwich Council is to spend £87 million on buying 232 new homes to boost its council home-building programme – including buying out a scheme in Woolwich that was opposed by locals.

The council is forking out £73.1 million for the leaseholds to two blocks in Greenwich Millennium Village blocks. One block, the ten-storey Hearn House with 99 homes next to Southern Park, appears to have already been completed.

Work is yet to start on the other block, on the corner of Bugsbys Way and the Southern Way bus lane, part of the final phase of the GMV development. Some of the 100 homes in the seven-storey building, currently known as Block 403, will be targeted at those coming from temporary accommodation, with the block set to be ready by the end of 2026.

The council will be paying service charges on behalf of the tenants who will move into the GMV blocks, which will be first council housing on the peninsula since development began a quarter of a century ago.

Another £13.9 million is being spent on 33 houses under construction in Sandy Hill Road, Woolwich. 

The money will come from a mixture of grants from City Hall, borrowing against existing council housing and cash from developers known as Section 106 payments. The cash was already set aside as part of a £398 million programme to start work on 1,000 new homes by 2026. 

Despite the multimillion-pound outlay, Greenwich has  not publicised its decision to buy direct from the developers, instead publishing it on an obscure corner of its website before Christmas.

Locals had opposed the Sandy Hill Road scheme, which involved demolishing a Victorian terrace and an old petrol station and replacing them with 32 flats and one house, calling the development too tall and too dense for the area. Labour’s David Gardner, then a local councillor, had also opposed the project. It only passed because of the casting vote of Stephen Brain, the chair of planning at the time. 

The developer, Charlton-based Lita Homes, had originally pledged that three of the homes would be for shared ownership, saying that it could not afford anything for people on housing waiting lists because of the cost of decommissioning the petrol station. 

But documents submitted to the council last year show that three housing associations declined to take the shared-ownership properties on. Greenwich had been due to accept a £300,000 payment so the homes could be sold on the open market, but will now pay Lita £13.5 million for the freehold and take on the homes itself. 

These are not the first major deals struck with developers to bolster the council’s building programme — in 2022 Greenwich agreed to buy 175 flats in Woolwich and Charlton that are being built as part of the Morris Walk Estate redevelopment scheme, a deal that also cost £87 million. 

In 2022 the council pledged to start work on 1,000 homes before 2026 as part of its Greenwich Builds programme. This was top of a first tranche of 750 that were planned to begin between 2018 and 2022, including major projects at Kidbrooke Park Road and the Brook Estate, which in itself is costing £352 million.

But progress has been slow, making buying into already-planned developments an appealing prospect – particularly with the council having to pay to put up  1,900 households in temporary accommodation. 

Last year, Greenwich revealed that it was spending £1.8 million on hotels because of a shortage of accommodation – including £800,000 with the Travelodge chain. Temporary accommodation accounts for half of the council’s projected £26 million overspend for all services this year, documents released last month show.