Rising interest rates and costs making some projects unviable
The planned Grange Community Centre development has survived the cull. Picture: Ealing Council / HOK Architects.
December 13, 2022
Housing projects that would have built hundreds of much-needed affordable homes across the borough of Ealing have been delayed due to rising costs which have resulted in the council’s housing company no longer being able to afford to build them. Eight new housing schemes were approved back in April, but now only three can definitely go ahead as planned following months of economic turbulence.
The three projects, costing more than £115 million together, will create around 277 housing units classed as affordable across three sites . These new housing schemes are part of Ealing Council’s housing company Broadway Living Registered Provider’s (BLRP) development programme.
But, this just half of what Ealing Council’s cabinet had committed to deliver in April 2022, when eight projects, delivering 564 new affordable units, were approved. But, due to volatility in financial markets after the mini-budget in September, a number of the projects were deemed “unviable”.
Speaking at Ealing Council’s Cabinet meeting on Wednesday (7 December), Councillor Lauren Wall said, “We have made significant progress on our plans to build 277 affordable homes across three sites. In a challenging national context for house building, it is really encouraging that we are still able to move forward with these sites as planned with grant funding provided by the GLA.”
The cabinet member for genuinely affordable homes further said that the borrowing rate, which increased from three per cent to six per cent following the “disastrous mini-budget”, almost meant that all eight projects were impossible.
She continued, “In common with other affordable housing providers across the country, our Broadway Living scheme has faced significant viability issues with rapid inflationary costs in the past two months. Officers have been working really hard behind the scenes for solutions to what has been a massive challenge. Initially, there were eight sites, we’re progressing with three and the rest will follow in the next grant programme.”
Broadway Living owns and manages new affordable housing on behalf of the council and, in November 2020, the council borrowed £400 million and gave the funds to the company along with a target of over 1,000 new affordable units to be built on council owned land in the initial stage of a plan which would have eventually seen over 7,000 units constructed. Although the council was able to borrow the money at relatively low rates, these have increased significantly in recent months leading to the reassessment of many schemes in the pipeline.
The Lexden Road development will bring three new buildings to the Steyne Estate in Acton to make way for 188 new homes. The Northolt Grange Community Centre will be turned into 92 new homes, nearly half of which will be one-bedroom flats. There will also be a row of eight four-bedroomed townhouses which will be sold under shared ownership.
On Sussex Crescent, a short walk from Northolt Underground Station, 26 new homes will be built in a four-storey block. Just six of the homes will have one bedroom, and the rest will all have two-bedrooms.
In November, it was revealed at a scrutiny panel that housing projects on Broomcroft Avenue in Northolt and Park View Road in Ealing, two of the original eight approved in April, would not be going ahead as planned.
The 41 homes intended to be built on Broomcroft Avenue were deemed “unviable and undeliverable” and will be included in the next GLA Affordable Homes Programme. The building on Park View Road, which was meant to be turned into 59 homes, will remain as a youth centre following a local consultation.
On Wednesday 7 December, it was confirmed that two more projects would be postponed until the next GLA Affordable Homes Programme. The 80 homes planned for Mandeville Road in Northolt and the 70 homes included in the Perceval House development are expected at this stage to be included in the next grant programme.
The other five projects, originally approved in April 2022, will be under review as to whether they can be delivered in this grant programme. If not, the council says they will be included in the GLA’ s Affordable Home’s Development 2021 – 2026 scheme.
Megan Stanley - Local Democracy Reporter