Cash-strapped Greenwich Council plans to scale back its homebuilding programme and will buy more properties to get people off its 28,000-strong housing waiting list.

Some improvements to council housing will also be delayed to free up funds to adapt the council’s high-rises to comply with any new rules that will follow the Grenfell Tower disaster. 

Rents and service charges will be going up by 2.7 per cent – the maximum allowed by government – after councillors were warned last week that the ring-fenced account for council housing was at the lowest level in the borough’s 60-year history. 

The council’s Greenwich Builds programme was launched in 2018 by its former leader, Danny Thorpe, with an ambition of getting approval for 750 new council homes within four years, mainly on smaller sites across the borough, such as old garages in council estates.

In 2022, with Greenwich well on the way to hitting its target, Thorpe included a pledge to add another 1,000 homes to the total in the Labour manifesto for that year’s council election.

But actually getting the homes built has proved more difficult, with costs soaring and many of the schemes running late thanks to problems in the construction industry. 

The senior council officer in charge of housing said last week that it would be better value to buy properties in bulk on new development rather than build on the smaller sites.

New housing on existing council estate
Buying in bulk was cheaper than building on small plots such as as this site in the Avery Hill Estate, councillors were told. Image: The Greenwich Wire

Two years ago, the council earmarked 22 sites around the borough for homes – including 40 flats at a former sheltered housing block on Langton Way in Blackheath and rebuilding Glyndon Community Centre in Plumstead with 10 new flats. But this number will now be cut down to seven, with the loss of about 90 council homes. 

Instead, the council now plans to buy between 650 and 700 new homes on new developments. This follows the council buying a block in Greenwich Millennium Village a year ago, as well as a nearly-finished development in Sandy Hill Road, Woolwich.

However, details of which sites will no longer get new housing – and where the council is planning to buy – is being kept under wraps for now.

Jamie Carswell, the council’s director of housing, said at an overview and scrutiny panel meeting last week that buying large numbers of homes in this way would be more cost-effective and attract more grant money.

New-build block
The first council tenants have moved into Hearn House, in Greenwich Millennium Village. Image: The Greenwich Wire

“The Greenwich Builds programme has had great success in building on small sites, but it has been expensive,” he said. “It’s a rebalancing to allow it to go further.”

Documents said that the council would be able to buy into developments where housing associations had struggled to take on the “affordable” housing element.

In 2019, the first 750 homes were costed at £240 million – four years later the bill had grown to £352 million, with cash coming from borrowing against existing council housing and using more money from right-to-buy receipts than initially planned. Some of this money is also covered by City Hall grants. 

And while Greenwich had hoped to use modular construction to get homes built quickly, these projects have been overtaken by traditionally-built housing after a subcontractor went bust.

In December the council accidentally revealed that it was paying an extra £11 million to finish a number of housing projects after Modpods International went out of business. The council refused to comment on the outlay, details of which were deleted from its website after an enquiry from The Greenwich Wire.

Two men and one woman outside a new council block
Anthony Okereke (right) with ward councillor Aidan Smith and a new resident at Bliss Crescent. Image: Greenwich Council

Greenwich announced on Wednesday that the first tenants had moved into its latest development at Bliss Crescent in Lewisham – however, a press release about this referred to the town hall “creating” 1,750 council homes rather than “building” them.

The council’s five-year £430 million capital repairs programme, launched a year ago, will now be extended to 2030, with delays to internal improvements to kitchens and bathrooms as well as external decorations so fire safety work on high-rises can be prioritised.

Asked about the rent rise, Carswell said the council had modelled a lower increase, but said that every percentage point was worth £1.4 million a year to the housing revenue account, which pays for council housing and is solely funded by rents and service charges.

“In the years 25/26 and 26/27, we are below the minimum working balances that are required to be financially prudently safe,” he said.

“This is the lowest level of balances that the housing revenue account in this borough has ever faced and if they drop below zero we would be illegal, be unable to trade and we would have emergency shutdown measures.”

Pat Slattery, the cabinet member for housing, said the financial pressure had been caused by fire safety work after the Grenfell Tower and the council’s historically low rent levels as well as the outlay on the repairs programme and Greenwich Builds. 

Other measures to raise money include continuing higher rents for new council rentals, increasing rents on garages by £1 a week and increasing rent on temporary accommodation so it is closer to general council housing. 

The proposals are due to go to the cabinet and full council for approval later this month.

Updated at 1pm on Wednesday to include the Bliss Crescent development.

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