Plans to redevelop an old estate in Charlton could collapse if Greenwich Council does not accept a deal to build fewer council homes on the site, councillors have been warned.
Two years ago Greenwich agreed to buy 90 homes, to be used as council housing, from the developer Lovell as part of a deal to rebuild the old Maryon Grove estate.
But now the council will only take up 53 of the 165 homes on the new estate, to be named Trinity Rise – a loss of 37 council homes.
Lovell now will be allowed to sell 33 homes, while the PA Housing association will convert its share of 79 homes from shared ownership to homes for London Affordable Rent, which is about 40 per cent of market rents and available to people on housing waiting lists.
Council officers say that allowing Lovell to keep some of the housing to sell will achieve a “mixed and balanced” community – and could save the cash-strapped council £10 million. Greenwich could now also benefit from a share of the profits if property prices rise.
The council’s cabinet voted to accept the agreement on Wednesday.
The Maryon Grove redevelopment is the final part of a regeneration scheme delivered with Lovell and PA that began in 2013. The Connaught Estate was demolished and rebuilt as Trinity Walk, providing the council with a windfall because of high property prices.
But work on the second estate, Morris Walk, stalled in 2019. There have been disagreements between the council and Lovell since then, and in 2022 the council had to put in £87 million to rescue the project. For this it got the 90 homes on Maryon Grove, as well as 175 on Morris Walk, the first of which are due to be handed over later this year.
Before that deal was struck, Maryon Grove would have been entirely for private sale or shared ownership with no council homes at all.
Jeremy Smalley, the council’s deputy director of regeneration and property, said the Maryon Grove scheme was “under serious threat” because of increased building costs for Lovell. “We’ve been discussing with our partners in Lovell and PA as well as the Greater London Authority to discuss how we might proceed,” he said.
“And what that means for the council is that we would take less units as council housing, but what we have done is insist that PA transfer what were going to be shared-ownership homes to [affordable-rent] homes.”
Smalley warned that Lovell could “walk away from the agreement” if the cabinet did not agree to the new deal.
“While on the face of it, it is difficult in a housing crisis to be seen to be seen to be reducing numbers, I think it’s a pragmatic solution to ensure that the supply of housing continues, and the supply of affordable housing continues,” he said.
Despite the cabinet papers, Smalley himself and even council leader Anthony Okereke referring to “social rent”, which is what most council tenants pay, the PA Housing homes would be at the higher London Affordable Rent level, although this would be covered by housing benefit for those who qualify.
Anthony Okereke, the council leader, said: “I guess the question must be, is our only ambition to build council homes, or increase homes of all types? I think that we would not be realistic to ourselves if were to say ‘we’re only going to build council homes.
“We want more social rent homes through housing associations, through the council, through the affordable rent space, and we will take that benefit rather than see the whole site ground to a halt.”
Majid Rahman, the cabinet member for planning and estate renewal, said:“We want a development that brings in people from all walks of life, as we know it will improve the area. I’m sure everyone is looking forward for the development to be complete.”
The old Maryon Grove estate had been left largely abandoned for some months before demolition contractors moved in last summer.
Greenwich’s 11-year-old deal with Lovell has been criticised by past councillors. In 2019, when work stalled on Morris Walk, the cabinet member for housing at the time, Chris Kirby, said the company had “badly let down” the council.
The agreement was signed off by former leader Chris Roberts and his cabinet. Kirby said: “If we were writing it now we would design it in a different way, but I’m not here to unpick old agreements.”
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