Sunday 19 June 2022

Cabinet set to approve financial arrangement to purchase 298 social rent units on Euro House (Wembley Park) site


The blocks on the former Euro House site between the Wealdstone Brook and Fifth Way


Monday's Cabinet will be asked to approve plans for the Council to make an arrangement for the purchase of a lease at three of the blocks that will be built on the former Euro House warehouse site in Wembley Park. The Council claim success in having negotiated an improvement on the amount of affordable housing available and that at social rent. in blocks D and E above It is partly financed by the Council managing 46 lettings at market rent in Block A.

 The housing mix has also changed with more family sized accomodation:

The main provisions are below. I have highlighted some of the possible risks.

This report seeks permission to negotiate and thereafter purchase a mix of affordable units in Blocks D and E and market units in Block A forming part of a development of Euro House, Fulton Road Wembley HA9 0TF. The Council will enter into an underlease for up to 60 years of Blocks A, D and E, from an Asset Special Purpose Vehicle (ASPV) who will have entered into a 999 year
headlease with the freeholder. The freeholder is Crown Wembley LP. The Council will have an option with ASPV to acquire the headlease for a peppercorn upon the expiration of the 60 year underlease. The site will be developed by a developer called Regal London. The scheme is due to start in September 2022 with an estimated practical completion date of Q4 2025 for the affordable rented homes


To finance the purchase of this block, the Council will take a lease of up to 60 years from the ASPV, with rents set at current day social rents and indexed at CPI plus 1% subject to a cap of 5% and a floor of 1%. Upon completion of the underlease, a reversionary 939-year lease will be granted at nil rent or peppercorn


The total cost of the lease based on a term of up to 60 years is circa £128M. The social rented units will sit within the Housing Revenue Account  and the Council will utilise the most effective mechanism to manage the market rented units. There has not been an opportunity to purchase these units or vary the tenure and size mix through a traditional financing mechanism.

The proposed scheme provides a target of 252 affordable units and 46 market units to be delivered through the lease. To ensure the scheme is financially viable, the Director of Finance in consultation with the Lead Member for Finance and the Operational Director of Property and Assets will negotiate the optimal unit mix that supports the increased delivery of the affordable units from the original proposal. This may result in a variation in the affordable unit and market unit mix from the target mix described in section 3.4 above.

With the proposed target scheme converting 34 market units to social rented units, this will enable the Council to claim £100k per unit for the additionality provided by the scheme and £28k per unit for the remaining 218 affordable units. The total grant claim expected to fund this development is £9.5M.

It has been assumed that the Council will receive 100% Stamp Duty Land Tax (SDLT) relief based on the assumption that:

a) The Council is deemed to be a relevant housing provider that is controlled by its tenants; and

b) The application of GLA grant receipts meets the requirements of a qualifying public subsidy.

These assumptions will need to be fully tested with the Council’s tax advisors and HMRC. Failure to secure the SDLT exemption noted above would increase the cost of the scheme.



Philip Grant said...

So many big decisions to make this morning. I wonder how long the Cabinet meeting will last?

Philip Grant said...
This comment has been removed by the author.
Martin Francis said...

If all controversy was limited to the pre-meeting, perhaps 40 minutes maximum?

Anonymous said...

The meeting won't take long at all. The decisions were made by the old cabinet/administration and anyway, there is no scrutiny in cabinet. This is rubber stamping as always. As for risk to Brent, they don't care.

Martin Francis said...

Yes 40 minutes (it started late). The lead memberfor 1 Morland and Watling Gardens was unwell and sent her apologies.

David Walton said...

Fail Better massive future liabilities pending here, with taxation without representation zones (developer-led pilots) the political consensus.

No wonder Brent (and London) is carefully zone separating its sustainable de-growth represented neighbourhoods from its new unsustainable hyper-precarious hyper-growth 'Drowning by Numbers' zones by design.

Anonymous said...

Since voting for the first time in local elections I decided that I would like experience our local democracy in action at the leading edge and decided that watching today's Brent Cabinet meeting would be a good place for that. Foolish me, what an appalling meeting that was.

The officers had nothing to say other than the Chief Executive reminding Cllr Butt that it was 24 homes and not 25 - she must have been asleep because Cllr Butt had already stated this about 6 times. The cabinet members had very little of value to say, poor cllr Sheth having to read the officer reports (is that because she doesn't know her brief?) and Cllr Butt adlibbing (badly) to fill in the silent voids. There were the (very) odd contributions here and there from the deadwood cabinet members: Southwood at least tried with her barely understandable waffle and poor jokes, Nerva, well, did anyone understand what he was on about? Tatler doing a PR exercise, Farah, no idea why he spoke and then the very, very sad and downbeat Donnelly Jackson, in future to be known as Eeyore. The Wikipedia description of Eeyore is quite fitting for this Cabinet, and not just Donnelley Jackson (but she carried it off to perfection) - what a bunch of pessimistic, gloomy, depressed, anhedonic persons, or let's just say a bunch of old grey stuffed donkeys.

Then there was the making of a decision regarding building new homes, but they didn't know what it would cost or what model would fit as pointed out by Caroline Downs the CE, then there was changing Social Housing to (High risk) Shared Ownership of the 24 homes. What a shambles, but does it matter, do they actually have an audience? As for the item regarding Morlands, no one seemed to know what that was about and was pushed out of the way very swiftly.

The only chance of something to keep us awake, a representation by the public, was refused by Cllr Butt as it was requested too late. What is he afraid of, or is he just a control freak?

What a waste of 40 minutes that was. If this is how Brent is run, I feel sorry for the residents. I'm going to watch Boris in future; at least his presentations are interesting.

Philip Grant said...

Dear Anonymous (20 June at 17:20),

Thank you for your refreshingly frank comment, on your first impressions of Democracy at Brent Council.

Martin, and others, have been trying to draw attention to the reality of decision making at the Civic Centre (and Town Hall before that!) for many years.

Some of my own experiences led me to write a guest blog in March, "Democracy in Brent - Are Cabinet meetings a Charade?" [ ]

Unfortunately, the most recent opportunity for people in the borough to change things for the better, the local elections in May 2022, saw Labour returned with a large majority (although with 8 opposition councillors, rather than just 4 before that).

Labour got more than half the votes, but on a turnout of just over 30% (down from 37% in 2018). It seems that most people in the borough don't think it is possible to change things, which is a sad state of affairs for local democracy.

I can understand your disappointment, and agree that the Clown Prince we have as Prime Minister is better entertainment, as long as you know that you can't believe a word of what he says, and can shut your mind off to the horror that he is actually running this country!