A collapse in house prices, even in London and the south-east, could put more pressure on the Town Hall’s creaking finances, thanks to chief exec Jo “We’re Not Stupid” Negrini’s cunning plan of spending public money on building 1,000 homes and flogging 600 or more of them on the private market.
Someone at Brick by Brick, Croydon Council’s house-builder (Number of homes delivered since 2015: 0; Financial losses last accounts: £1.1million) has been very busy in the past fortnight, repeatedly posting virtue-signalling links on social media to what they must see as “favourable coverage” in a Evening Standard’s estate agents’ advertising supplement.
“Flying the flag for Croydon,” they claim, adding the falsehood, “building the new homes that Londoners need.”
But the link to the Standard’s housing coverage that no one at Brick by Brick has shared is to the potentially alarming suggestion that London’s property bubble is about to burst.
Rising interest rates and Brexit uncertainties have seen the biggest fall in London house prices in nine years, while inflation has edged up for the first time since November.
As the Standard reported last week (but no one at Brick by Brick bothered to mention), “Figures released today show a dip of 0.7 per cent in the year to June — the largest drop since 2009 when prices fell by 3.2 per cent — taking the average cost of buying a London home to £476,752.
“While average prices are now £2,100 lower than a month ago, a recent report reveals first-time buyers in London need to raise eye-watering deposits of £115,000 in order to get on to the property ladder.”
The Brick by Brick social media campaign – doubtless paid for out of public funds – has wrapped itself in a cloak of coverage from an advertising features section, Homes and Property, which generates important newspaper revenue from the capital’s bullish estate agents – the very people for whom social housing is anathema.
Brick by Brick’s focus on the private sales market is just the latest illustration that the council-funded company, building on council-owned property, is doing little to provide the kind of housing which is really needed: social homes for rent.
Brick by Brick has a target of providing 50 per cent non-affordable “affordable” housing in its first tranche of 1,000 homes. The company’s own figures have suggested that, because of “viability” issues around its sites, it is struggling even to deliver 40 per cent affordable homes.
Away from the vacuous froth of the estate agents’ advertising, the Standard’s news section was reporting that the Office of National Statistics’ report for the year to June “indicates a fall in house prices for the fifth consecutive month, however the ONS has revised the annual data relating to London due to delays in the registration of some property sales”.
The latest UK Economic Outlook report by PwC forecasts house prices in London to fall by an average of 1.7 per cent in 2018, and 0.2 per cent in 2019. Just at the time when Negrini’s pet project, Brick by Brick, will be putting its first properties up for sale, with council hopes pinned on making as much money from its private sales as possible, to pay for the other homes it is developing. If it fails, then it will be Croydon residents who take the hit.
Unfortunately, especially for those hard-working Croydon families who will never be able to afford the Thatcherite wet-dream of “getting a foot on the housing ladder” by saving enough for a deposit, Negrini and our Labour-run council’s house-building strategy almost completely overlooks providing any homes for social rent.
Perhaps as worrying as the financial risks being taken by Brick by Brick to enter the private house-building market is the slowness of all developers in the borough to actually get round to building at all.
In the three years from 2015 to May 2018, according to Croydon Council figures, only 1,848 homes were completed, despite the council handing out planning approval for 8,699 homes.
But the lack of housing provision at the social end of the scale, where there is little if any immediate profit to be made for developers or estate agents, ought to be of grave concern.
Of those 1,848 new homes built in Croydon, just 77 were categorised as being “affordable”, and only 23 were for social rent.
This was during a period when Negrini, the £200,000 self-proclaimed “regeneration practitioner”, has been in office and while Tony Newman has been the council leader and Alison “Two Houses” Butler has been in charge of housing.
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