“Berkeley calls affordable housing targets ‘unviable’ as chairman earns £174m”

“… Excluding developments where planning consents were gained by a previous owner and the student accommodation projects, in 93% of Berkeley’s 57 London developments the company told local authorities that their affordable housing targets were unviable.

In one example, Land Registry data indicates Berkeley Group sold 71 homes in its Ebury Square development in Belgravia, central London, for a total of £358m.

The company told Westminster council that as the development was refurbishing an existing building that contained 60 units, only 11 additional homes would be generated. This meant, under Westminster planning rules, that Berkeley was obliged to build only one affordable home. But instead of building it on site, Berkeley made a payment to the council of £1.6m towards low-cost housing elsewhere in the borough.

Freedom of information disclosures show that Berkeley bought the Ebury Square site – a former police house – from the Metropolitan Police for £23.6m in 2009. The profit on this single development is thought to be in excess of £200m.

At Kew Bridge in west London, Hounslow council accepted that Berkeley could only build 20% of a 308-unit scheme as affordable – half the local authority’s affordable target.

Building those units, Berkeley stated in a planning agreement, would mean the scheme would be £24.6m in deficit. Berkeley told Hounslow that house sales would generate £132m. Berkeley did agree to make an extra payment to Hounslow capped at £8.3m in the event of the scheme performing well. Land Registry data suggest that the scheme generated close to £250m, with one apartment selling for £4.55m.

A spokesman for the company said: “Berkeley has a sustainable, successful business model that enables it to perform well throughout the economic cycle, as demonstrated by its results of recent years and creation of fantastic new communities and long term value. We are justly proud of our track record in building 10% of London’s much-needed private and affordable homes.

“Last year alone, Berkeley contributed more than £400m of subsidy for affordable housing and wider community and infrastructure projects, which has helped us be recognised as London and the south-east’s leading place-maker. Sales utilising Help to Buy are a very small part of Berkeley’s sales.” …

https://www.theguardian.com/business/2018/sep/03/berkeley-calls-affordable-housing-targets-unviable-as-chairman-earns-174m

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