Yuppies, riots, the half-priced £1.5m flats and Rouse’s Folly

Aimed at delivering “high-end” apartments for young professionals – in the middle of a busy roundabout – IYLO remains unfinished, a monument to shortcomings of Croydon’s masterplan

A constant theme in our council’s various “masterplans” is a massive increase in the number of people living in the centre of the borough – mainly in high-rise blocks. In doing this, CR0 CRUSADER asks, whose interests is our council serving?

At first sight, the 17,000 new residents planned by Croydon might be a good thing if two pre-conditions are met: that this new housing serves the needs primarily of the people of Croydon; and local jobs and an adequate social infrastructure (schools, healthcare and culture) will be in place to support this population increase.

On average, Croydon is not the wealthy suburban borough many may imagine. Average earnings are less than £30,000 per year (according to the Office of National Statistics’ annual survey, December 2011). According to the Land Registry, the cost of the average Croydon home (at May 2012) was £247,000.

Given Croydon’s stratospheric price income housing ratio, it’s clear there’s an urgent need for affordable housing in the borough, perhaps some social housing, or even something which used to be called council homes. By shipping the homeless off to Manchester and Walsall, Croydon Council has admitted that it has failed to provide adequate accommodation for the 400-plus families in the borough without homes.

So you would imagine that our council might do its utmost to ensure that a high proportion of the new flats in central Croydon would be “affordable” for ordinary, hard-working people.

Yet it was clear from the architecture exhibition staged at the Fairfield Halls that the new flats will be priced at levels that are unaffordable for average earners. Indeed, the exhibition’s clear message is that these flats are being targeting at yuppies – the young upwardly mobile. Since the plans allow for around 7,500 new homes, it is also clear that Croydon’s plans are not aimed at providing homes for families with young children. As Croydon isn’t noted for its indigenous yuppie population, the implication is that well-heeled buyers from outside Croydon are the target market.

Will they want to move to Croydon?

We have already seen a number of high-rise residential towers in built in central Croydon, such as Altitude 25 (115 flats over 25 storeys) and IYLO (183 flats over 20 storeys – if it ever gets built). The exhibition featured Saffron Square, which is under construction (719 flats over 43 storeys), as well as the Menta (499 flats over 54 stories) and Guildhouse Rosepride (400 flats over 55 storeys) towers – where planning permission has been granted but work has yet to commence. Although Stanhope/Schroders’ Ruskin Square scheme primarily consists of office space, it still incorporates another 617 flats. Our council intends to demolish Taberner House and replace it with a tower comprising 330 flats.

The experience of Croydon’s two luxury high-rise residential towers – the largely empty Altitude 25, and the incomplete IYLO – doesn’t inspire confidence.

Who can afford this view? Croydon as seen from one of the upper floors at Altitude 25

The block’s management did not confirm it, but there’s a suggestion that the Fairfield Road apartment block will be renamed Altitude 23 after the weekend, when two more residents are expected to move out.

A search of the property market indicates there’s plenty of apartments in Altitude 25 up for sale, going for a bargain £600,000 for a two-bedroom penthouse. Similar apartments were on the market for around £1.2 million when Croydon’s tallest residential tower opened in 2009. That’s hardly the kind of return on investment that yuppies want.

Altitude 25 and IYLO were blighted by financially weak developers. The developer of Altitude 25 – Howard Holdings – was going bust as the tower was being constructed. The financial problems are suggested by a shoddy level of fit and finish. IYLO’s developer, Phoenix Logistics, went into administration in the very early stages of construction, and a succession of owners and developers since have been unable to retrieve the situation.

Despite the lessons that our council should have learned from Howard and Phoenix, it continues to grant planning permissions where there are funding doubts.

Last year, within a day of planning permission being granted for what is proposed to be England’s tallest residential tower, the local MP, Gavin Barwell, was sceptical of Menta’s ability to secure funding for its edifice: “We will wait to see whether the developer will actually build the scheme or, as some suspect, sell the site now it has planning permission and bank a profit.”

For a developer, gaining planning permission to build hundreds of flats on a plot of derelict land is like winning the Lottery. The developer immediately gains a huge windfall profit on the value of the site. You would imagine that the quid pro quo for this windfall is that the developer would complete a high-quality build in a reasonable time.

You might even expect the council to ensure that developers had the necessary funding to deliver on the plans submitted. However, in the case of Menta, Howard and Phoenix, our council has gifted planning permission for applications that are seeing long delays, poor quality construction and unfinished builds.

Croydon council’s pandering to Menta is hard to understand. Despite the 604 local residents who objected to Menta’s application, planning permission was granted. If that wasn’t enough, £20 million of public money (£6 million from Croydon) is being spent on the East Croydon footbridge.

But as Inside Croydon was first to report earlier this week, Menta have refused to (can’t?) pay its £2.3 million contribution to the bridge, and may even block Network Rail from building the end of the bridge on their land. This footbridge to nowhere risks becoming a monument to Croydon Council’s craven courting of multi-millionaire property speculators – Rouse’s Folly.

An artist’s impression of what the new footbridge at East Croydon station should look like – but where will the £20m structure lead to?

The real test of whether yuppies will buy high-rise Croydon flats will be provided by Berkeley Group’s Saffron Square. Berkeley is a financially sound and well-established builder. You would expect Berkeley’s construction work to be of high quality.

But it returns us to the fundamental question: will any yuppies be attracted to Croydon?

Even before the riots, Croydon could hardly be called “hip”. The riots have trashed Croydon’s already poor image. Croydon’s local economy is in a “death spiral”, with job losses at Nestle, Allders and Bank of America. And what part of Croydon’s reputation the riots didn’t trash, Croydon’s council has done its worst by closing the borough’s cultural provision at the Clocktower and Warehouse Theatre. Yuppies are hardly likely to be drawn to Croydon by nights out at Tiger,Tiger, or impressed by the Fairfield Hall’s staples of tribute acts, mind readers and wrestling.

Selling luxury flats in central Croydon after the riots will be a Herculean task, yet our council is firmly wedded to this “strategy”. Why? Is there is an underlying political motivation?

Croydon Town Hall is finely balanced, with the Conservatives holding sway. The old Croydon Central parliamentary seat was a wafer thin marginal. The proposed Croydon Central and St Helier seat is also likely to be a marginal. Just as Westminster’s council tried to do in the 1980s under the disgraced Shirley Porter, using public funds to help “gentrify” key areas, there is political advantage for the Conservatives in social engineering parts of the Croydon.

Given the riots stigma and worsening economic crisis in Croydon, there is a danger that this backfires. What happens if the yuppies don’t buy-in to council leader Mike Fisher and chief executive Jon Rouse’s dream? The apartments end up being bought by buy-to-let investors, who then tap into a ready source of secure revenue, through housing benefit subsidising their tenants’ rents, as needy families are squeezed out of central London to “cheaper” outer London boroughs.

Like Croydon.

  • See how Croydon chief executive Jon Rouse, speaking to property developers, investors and speculators at a “Develop Croydon” event (latest slogan: “Croydon: London’s next big opportunity”), spent 10 minutes making sure that he did not tell “a story that doesn’t match our reality”:
  • Inside Croydon: For comment and analysis about Croydon, from inside Croydon
  • Post your comments on this article below. If you have a news story about life in or around Croydon, a residents’ or business association or local event, please email us with full details at inside.croydon@btinternet.com
Advertisements

About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in Addiscombe West, Cherry Orchard Gardens, Commuting, Croydon 8/8, Croydon Central, Croydon Council, East Croydon, Environment, Fairfield, Housing, IYLO, Jon Rouse, London-wide issues, Menta Tower, Planning, Property, Ruskin Square, URV and tagged , , , , , , , . Bookmark the permalink.

1 Response to Yuppies, riots, the half-priced £1.5m flats and Rouse’s Folly

  1. derekthrower says:

    What happens when the dream of homeownership becomes no longer tenable. Croydon is the experiment. A post-Thatcher landscape.

Leave a Reply