WALTER CRONXITE, our political editor, on troubling reports for a council which has staked so much capital on profiting from the housing market
With local elections just 10 months away, there’s a couple of brief reports just out which ought to be matters of deep concern to Tony Newman, the leader of Croydon’s Labour-run council, as the news comes just at a time when he and Jo Negrini, the chief executive, have got the local authority dabbling with millions of pounds of public cash in the residential property market.
An opinion poll conducted for a property investment fund, London Regeneration, has found levels of deep discontent among Croydon residents. The survey notes residents’ complaints of a lack of culture, and widespread rejection of many of the newer developments in the borough.
Only 7 per cent of residents said it was the culture in Croydon which gave them pride in the place.
And when asked identify what had been the best addition or example of improvement in Croydon over the course of the past five years, 25 per cent of respondents were unable to identify any improvements whatsoever.
If that was not enough of a shot across the bows for the self-declared “regeneration practitioner” Negrini, then the annual results from up-market estate agents Foxtons will be a real worry just as her pet project, Block by Block, the council-owned housing developer, is trying to build and flog off 1,000 new homes in the borough.
Foxton’s profits have fallen by 64 per cent, which the estate agents attribute to slowing demand and increased economic uncertainty.
Now no one is going to weep buckets for sharp-suited estate agents having a harder time than usual. But the company report could be a worrying harbinger for the state of the Town Hall finances in the next couple of years.
Block by Block is the second time in a decade that the burghers and local authority pen-pushers at Croydon Council have attempted to rub shoulders with the wheelers and dealers in the property market. CCURV, the “urban regeneration vehicle” dreamed up by the previous Tory administration when Jon Rouse was council CEO, was a complete flop.
Launched into the teeth of the global economic downturn, CCURV has lumbered Croydon residents with debt for many years to come. But we do have the council offices at Fisher’s Folly, which is nice.
Negrini’s “bright idea” with Brick by Brick is that by over-developing the borough, using council-owned land and property, Croydon can do something about its housing crisis while using the profits from flogging off half the properties it builds to pay for other council activities, such as the refurbishment of the Fairfield Halls.
But Brick by Brick has already encountered a number of problems, not least widespread hostility from residents in a number of neighbourhoods who really don’t appreciate having ugly blocks of flats built in their back gardens. A potentially costly Judicial Review may be on the way to challenge at least one of the Brick by Brick schemes.
The council’s promise that 50 per cent of the Brick by Brick homes would be “affordable” (which everyone now realises means nothing like “affordable” for most ordinary working people) is also beginning to unravel. Balancing the finances of the 1,000 new builds has already forced the Town Hall to admit that it will need to sell off nearly 600 of the homes on the open market.
And anecdotal reports from investors and property owners in Croydon also reflect some of Foxton’s anxieties about the market in London as a whole, with some over-supply of new flats dragging down the asking price for sellers and the rents that landlords can command.
Foxtons has been warning since 2014 that the London housing market’s double-digit price rises and strong demand were cooling. But following last year’s Brexit referendum result has seen the estate agency hit an iceberg.
Nic Budden, Foxtons’ chief executive, referred to, “unprecedented economic and political uncertainty” for the company’s fall in profits. Budden said that the London market was “severely impacted” by the Brexit vote, which he claimed had led to a “substantial reduction in property sales transactions”.
If such considerations play out over the course of the two-year negotiations over Brexit, Croydon Council could find itself committed to the costs of building hundreds of homes, but unable to generate from their sale – if they sell – the kind of revenues which can help to pay off bills such as the £30million required for the Fairfield Halls.
But if a quarter of residents really have not noticed any improvements in their borough in the past five years – with Newman’s Labour council having been in charge since 2014 – then that might become an important factor at the polls for the Town Hall elections next May.
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