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.

 

UPDATE: Wembley coal mine shaft and tunnels to be investigated before Euro House redevelopment goes ahead

Euro House, Fulton Road

Ok, that's a bit if a tease but the Planning Officers' report for the redevelopment of Euro-Parts', Euro House, Fulton Road site includes the following comment:

The history of the site has largely been as agricultural land until the area became managed parkland forming part of the wider Wembley Park during the late 19th/early 20th Century. In the 1920s, the site formed part of the area for the British Empire Exhibition, and this section of the site was occupied by a life size construction of a coal mine, including a stretch of below ground tunnels, a brick lined access shaft and an air shaft, as well as above ground structures. Although the above ground and immediate sub-surface structures were removed when the site was re-developed for the current industrial use, the report concludes that there is evidence some of the shafts and tunnel structures could still exist. For this reason, the report concludes that further work to identify and record these elements should be undertaken and need GLAAS input if required.

 

 

Images courtesy of Philip Grant/Wembley History Society

The rest of the report is rather more mundane in comparison as approval is suggested for a scheme of one 21 storey block of flats, surrounded by 12 storey 'mansion' blocks and incorporating some light industry space to provide employment - a rather late recognition of the impact of the many sites that are being sold for housing.

 

The illustrations of the scheme are rather sparse but are very much along the lines of the existing developments. One novel aspect is an objection from Quintain to the proposal on the grounds that it will deprive residents in its NE4 neighbouring site of light and they request a reduction in height. Officers basically tell them that the nature of the redevelopment of the area means they have to put up with it.

It is hard to reconcile the above image with the plans for the area around the buildings that are claimed to include some allotment plots for residents and a walkway alongside the Wealdstone Brook:

On housing the devil is in the detail. There are 493 units of which only 98 are affordable.  Of these 80 are at London Affordable Rent and 18 shared ownership.

The application will be decided at Planning Committeee tonight at 6pm. Officers' Report HERE

 

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