A developer has asked Southwark Council to let it put 58 affordable flats onto the private market.
YourTRIBE student housing has offered to pay the council £2 million instead – which would go towards affordable housing elsewhere in Southwark.
The developer claims it cannot find a housing association willing to buy or lease the flats, which have already been built.
YourTRIBE received planning permission for the development on Ilderton Road, Bermondsey, in May 2021.
Southwark Council rubber-stamped proposals to build 250 student flats and 58 affordable homes in blocks of fifteen and thirteen storeys.
71 per cent of the affordable flats would be let at social rents and 29 per cent let at intermediate rents – typically 80 per cent of market rates.
The 250 student flats would be 35 per cent affordable, meaning not exceeding 55 per cent of the maximum maintenance loan for London students.
However, with construction now complete, YourTRIBE asked to alter the agreement on December 6, 2024.
The developer claims to have approached 33 registered housing providers on the council’s approved list but received no interest in the flats.
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‘The applicant has also approached several Registered Providers that are not on the Council’s approved RP list with again no interest received,’ Rok Planning wrote on behalf of YourTRIBE.
The applicant claims housing providers are hard to attract amid high inflation.
It also said providers prefer to buy flats on developments where they can get government grants to build more units.
Given the planning permission is already in place for this development, and construction completed, this could be difficult on the Ilderton Road site.
YourTRIBE has offered Southwark Council £2 million to compensate for the loss of affordable housing which would be spent on affordable housing elsewhere in Southwark.
Southwark Council’s decision whether to approve the changes will hinge on several factors.
These include the potential political fallout and whether it considers £2 million a fair offer.
Last year, faced with a similar conundrum over a development in Rotherhithe, Cllr Richard Livingstone said it cost over £100,000 to build a habitable room.
The 58 affordable homes YourTRIBE wants to make private contain 164 habitable rooms.
Southwark Council will also have to consider whether YourTRIBE has tried hard enough to market the affordable units.
The developer claims it conducted “extensive marketing” exercises in early 2023 and August 2024 but received no interest.
Indeed, housing associations have previously told the media that they are struggling to afford to buy or lease affordable housing.
In October, Paul Hackett, chief executive of Southern Housing, told the Observer that housing association capacity had been “decimated”.
“In simple terms, the cash we receive from our rents is insufficient to cover all of our costs,” he said.
The situation was so bleak that the association, which owns 80,000 homes, had stopped buying new sites.
YourTRIBE has highlighted other instances of payments being accepted instead of affordable housing elsewhere in Southwark.
In August 2011, Southwark Council accepted an offer of £1.2 million instead of providing six shared ownership dwellings.
More recently, in July last year, Southwark Council allowed developer Scape to pay £5.4 million instead of providing affordable homes on a 135-bedroom student development in Canada Water.
YourTRIBE was approached for comment.
If the council accept £2 million to waive the provision of affordable homes, they should all be surcharged. At a mere £35,000 per unit compensation, the developer is “having a laugh”. For how much are the rest of the flats being sold or let?