Council housing

[legalalien]

It looks as though economic circumstances have done for Southwark’s aim to build 11000 new council houses by 2043- with this honest appraisal in the report for Cabinet:

“ The current economic uncertainty makes accurate financial forecasting less certain. The cost of living crisis, the rise in energy prices and and the Russia/Ukraine conflict has increased political and economic volatility and made financial projections extremely difficult to determine. For example, the government target for CPI is 2% but CPI rose by 10.7% in the 12 months to November 2022 which is obviously significantly higher than the government target. Social housing rents have been capped at 7%, much lower than CPI+1% which is normally the calculation mechanism. Build and repair costs have increased even more significantly and have

impacted on the monies available to finance the housing capital programme. The Building Safety Act 2022 has brought about legally compliant costs which have to be funded from within existing council resources. The council’s move to carbon neutrality by 2030 will also incur costs not previously accounted for. The target to build 11,000 new homes by 2043 is unattainable due to the lack of financial resources, increased build costs and the increase in interest costs on additional borrowing, where the base interest rate has increased from 0.1% in March 2020 to 3.5% in December 2022.

12. All in all, the circumstances facing housing local authorities now are very different from those faced two years ago and the council has to adapt to meet the challenges, of increased capital spend priorities but insufficient resources to meet those needs.”

This is take from a report about one of the buildings on the Abbeyfield estate and it’s a sorry tale of stripping the building for refurb, leaving it empty for an extended period, realising what seems to be quite late in the piece that the building wasn’t structurally sound enough to cope with an additional rooftop build… and they’ve now decided to pull the whole thing down (a further £4 mill on top of £15 mill spent to date) and if I’m reading it correctly they can’t afford to build a replacement. I guess that means they end up selling to developers?

I feel really sorry for tenants in the two buildings next door who are now going to have repairs etc which they have to contribute to, plus a lengthy period of uncertainty while consultation about next steps happens and a massive demolition on their doorstep.

https://moderngov.southwark.gov.uk/documents/s111617/Report%20Abbeyfield%20Estate%20-%20A%20way%20forward.pdf