Guest post by Philip Grant in a personal capacity
An entry from Brent Council’s latest Forward Plan
Dear Brent Council,
I think that you’ve become too complicated in the
way you seek to provide the new Council homes that many local people need.
Take, for example, your decision (at last
November’s Cabinet meeting) to buy a block of flats at the former
Alperton Bus Garage site. The
developer, Telford Homes, was given planning permission to build three tower
blocks there, on condition that one of them, block C - containing 155 of the
461 flats proposed in their application, would be as “affordable housing”.
South-west elevation drawing from the planning
application documents (block B outlined
at the back)
Normally, when a private developer agrees a large-scale
affordable housing offer, they do so in partnership with a housing association which
will provide those homes. But here, it is Brent Council who have stepped in to
acquire them. And the Council is not buying them direct from Telford Homes. It
is proposed that they will be acquired from an Asset Special Purpose Vehicle
(“ASPV”). Who or what is an ASPV?
That would be explained in the report that Cabinet members made their
decision on, wouldn’t it? If it
was, the explanation was in one of the (now all too common) exempt appendices. Looking
at the minutes of the meeting, all the Lead Member for Resources, Cllr.
McLennan, said about the ASPV was simply a repeat of the Officer’s report :
Opening section of the
November 2021 Cabinet Report
The report to the
meeting was not from the Director of Housing, but the Director of Finance. No
questions were asked about why the Council was not buying the flats direct from
the developer, who the beneficial owner of the intermediary ASVP was, and why
it would not be a straight 999-year lease. Cabinet members seemed more intent
on congratulating the Council, its finance team (and themselves?) for the
proposal they were about to “rubber stamp”:
‘In expressing their
support for the proposal, Cabinet highlighted the opportunity the scheme
provided to further increase the supply of affordable social housing within the
borough based on a leasing model which was felt to represent good value for
money. Officers were thanked for their efforts in securing the
necessary terms ….’
But how ‘good value’ was this ‘leasing model’? The
Council would be taking an initial 50-year lease on 155 homes in a 26-storey
tower block (55 x 1-bed, 49 x 2-bed, 46 x 3-bed [5 person] and 5 x 4-bed [6
person] flats). The report from the Director of Finance said:
‘Officers have been in discussion with the ASPV
regarding the possibility of purchasing these homes. An offer has been on a
purchase price of circa £48M via private treaty on a 50 year leasing
arrangement, which means an average of £280K for each home.’
The report then goes on to say:
‘The target average development cost under the New
Council Homes Programme (NCHP) is £280K per home. As such, the leasing model
represents good value for money.’
It appears from this that the cost per home for the
leasehold flats at the Alperton Bus Garage site would be no better than
the development cost for freehold homes on one of Brent Council’s own
housing projects, over which the Council would have much better control.
And the £280k per home figure is dependent on the
deal to buy leasehold flats from an ASVP (which only has an option to acquire
them from the developer) qualifying for a £4.3m grant from the GLA, and that
the Council would qualify for 100% Stamp Duty Land Tax relief on its leasehold
purchase, which is not certain:
‘These assumptions will need to be fully tested
along with the Council’s tax advisors and HMRC. Failure to secure the SDLT
exemption noted above would increase the cost of the scheme by circa £1.9M.’
Why is Brent Council getting into such a complex
and potentially risky deal? If it has £48m available to spend on new Council
homes, why not spend it on building those homes on a vacant site it already
owns, and for which it has had full planning consent since February 2021?
Diagrammatic view of Brent’s Cecil Avenue housing
scheme. (From an April 2021 Council
document)
I am referring to the Cecil Avenue site, part of Brent’s Wembley Housing Zone, which I have been writing about since August
2021. As can be seen from the image above, this development is not a tower
block (maximum height 9-storeys), it will have an internal garden square and
includes family-sized maisonettes with their own private gardens. Surely that
would provide better new Council homes for Brent people in housing need?
At the moment, following a Cabinet decision six
months ago, it is proposed that 152 of the 250 homes to be built at Cecil
Avenue (including 20 family-sized homes) would be for a developer partner to
sell at a profit. In an article last month, I asked why Senior Council Officers and a small
number of Cabinet members (with the rest not questioning it) were appearing to
favour developers over Brent residents in need of a decent Council home? We
are all still waiting for an answer!
I’ve set out the question and the evidence behind
it. Now here is my advice. Avoid the ASPV! Ditch the developer! Get on and use
the money you were willing to spend on 155 homes in a leasehold tower block in
Alperton, and instead build all 250 of the homes at Cecil Avenue (including the
152 you planned to “give away” to a developer) as affordable rented Council
homes. You know that is good, plain common sense.
Yours sincerely,
Philip Grant.
P.S. My consultancy fee for this sound advice is
the same as usual - £zero!
