How much should it cost to build a new council flat on land already owned by the council? For Southwark Council it would appear that the figure is £383,258* – more than the cost of purchasing ‘luxury’ flats from private developers, or more than two ex-council right to buy properties (such as this). If the council bought at auction, it might even be able to buy 3 flats for the price of 1 (such as this). But instead it appears councillors agreed on Tuesday’s planning committee to grant £43,308,245 for the construction of just 113 affordable housing units.
£26,944,122 of the money comes from affordable housing funds paid by developers who claimed it wasn’t practical to build affordable in their expensive schemes. This consists largely of £22.6m from the South Bank Tower, a scheme of 191 riverside luxury apartments. The apparent cost of the council’s units makes this argument laughable when many of the private units built instead cost significantly less. The remainder comes largely from Right to Buy receipts, which surely indicates that the council lost more homes just to fund the 31 homes the portion of the overall kitty represents.
£43,308,245 could have bought 86 flats in the new One the Elephant skyscraper in Elephant and Castle, 84 three bed houses in Camberwell or as many as 250 unmortgagable former right to buy properties in the borough.
Is this yet more evidence that the move away from on site affordable housing has been disastrous for the numbers of social housing units built. The topic of which was the subject of our LOREMA report on London’s affordable housing earlier this year.
*Updated figure based on total funding towards affordable housing. Shared ownership 8 units excluded as separately funded. 10 private sale units excluded due to expectation of sale price covering costs. £43,308,245 for 113 social housing uses equals £383,258.