Developer Bellway have submitted a plan to alter the affordable housing mix at a development in Woolwich.
The plan sees affordable rent units altered to shared ownership – which is more profitable to developers to the tune of £150 per square foot
What is interesting is how little Bellway tried to offer – and how they’ve continually revised that as Greenwich Council, to their credit, refused the offers.
At first the developer offered just £72,000 to the council in lieu of the reduction in more “affordable” homes and stated it “represents the maximum reasonable contribution the scheme can support and deliver Optivo’s preferred housing mix.”
After rejection, Bellway came back and stated “given the urgency to deliver the scheme and contract with a Registered Provider we are prepared to increase the offer to £100,000.”
A third party viability appraisal advised this was insufficient and it was again rejected.
Then Bellway came back with £290,000 in July. Further discussions took place and an agreement was made for £300,000 in October. It is now before Greenwich’s Planning Board next week.
The development is for 65 flats in a six storey building comprising of:
Could Greenwich have got more than £300,000 or stood firm and not allowed alterations to the prior agreement given planning permission was only gained in March 2018? Who knows.
It’s welcome to see such negotiation however, and to gain more than four times what Bellway initially offered and claimed was the “maximum reasonable contribution” is revealing.
The £300,000 will be spent, if approved, on affordable homes elsewhere. And this is where issues do arise, as despite this negotiation, previous policy agreement means Greenwich are spending income allocated to housing on the least cost effective manner when securing new affordable homes, according to their very own figures.