On Monday night in the Town Hall chamber, while keeping a straight face (perhaps she even believes her own bullshit?), Alison Butler actually tried to claim that Brick by Brick, the council-owned in-house house-builder “is delivering homes and is delivering profits to the council, and continues to be on target”.
Yet just the previous week, Butler had got the Labour-run council’s cabinet to rubber-stamp a £6million bail-out for Brick by Brick, the housing company which had failed to get itself registered as a recognised provider of shared ownership homes.
At Longheath Gardens, round behind South Norwood Country Park, 24 Brick by Brick flats intended to be sold as shared ownership homes are nearing completion. The company’s managing director, the bungling Colm Lacey, and Butler were only too aware that not being able to move these properties off the company’s books promptly is liable to create issues, which according to its own accounts has never made any profits and which has already received £260million in public cash in loans from the council.
Inside Croydon revealed earlier this month that prospective home-buyers for BxB flats in Flora Court in Thornton Heath had been told that they would not be able to go ahead with the sales because mortgage companies and other lenders require the vendor – Brick by Brick – to be registered as a provider of shared ownership homes.
Which is why Croydon Council has stepped in with more public money to buy up 24 flats in Longheath Gardens. Instead of being released on to the housing market as costly shared ownership homes, they will now be rented out at social rents. Which, at least, is an improvement of sorts.
But it is being done at considerable cost to the public, in the latest example of Croydon Council as a kakistocracy.
Are you sitting comfortably? This is how it works…
Croydon Council sets up a house-building company, Brick by Brick, in 2015. It borrows £260million from the Treasury at very low rates of interest. It lends that money on to Brick by Brick, which uses some of it to buy public land and property at very cheap prices from… Croydon Council.
Brick by Brick builds on these sites. Some of the buildings (though not very many), Brick by Brick sells on the private housing market. Some of the buildings it cannot sell. So along comes Croydon Council with another £6million of public money to buy up the homes, which have been built on public property using public money.
But that’s exactly what Butler has done with Brick by Brick’s Longheath Gardens scheme – a project which has antagonised existing residents, with the builders’ slow progress (the development has over-run by around nine months) and the imposition of having blocks of flats built in the spaces between their existing homes.
According to a statement issued by the council’s own propaganda department, the 21 one-bedroom and three two-bedroom homes “will go to borough residents in priority housing need, who are expected to move in by the end of March”.
The council’s mantra remains, “Brick By Brick was set up to build over 2,000 good-quality homes on council land, including around half as affordable homes, with profits from private sales going back into council services.”
In fact, when the whole scheme was introduced as Croydon’s solution to the housing crisis, there was a solemn undertaking from Butler, Lacey – then a mere council employee – and council chief exec Jo Negrini that 50 per cent of the BxB homes would be “affordable”. In 2019, according to Brick by Brick’s own figures, only 39 per cent of the homes its was due to complete would have been “affordable”. The vast majority, 71 per cent, were going for private sale, with some houses on the market for £600,000.
Over time, that might average out more towards affordable homes, though Lacey himself has admitted that under him, Brick by Brick will not meet its affordable targets.
In five years, Brick by Brick has so far delivered just three one-bed flats for social rent – what used to be called council flats.
As it has worked out, the majority of what Brick by Brick wanted to pass-off as “affordable” were to be shared ownership homes, the very kind of home for which Brick by Brick is not registered as an approved provider. According to Butler at Monday’s council meeting, “they weren’t required to register for anything”. According to Brick by Brick’s emails to prospective buyers, they are required to register, and it could be 12 months before Brick by Brick’s registration as an approved provider comes through.
In the meantime, Butler and the council’s propaganda department have decided to play around with some figures.
According to their creative accountancy, because the Mayor of London – that is, London’s Council Tax-payers – is being mugged for £100,000 per flat in Longheath Gardens, Croydon is therefore getting the properties for “only” £3.6million, instead of £6million. And we’re all supposed to be grateful.
The council press release chirped: “Using ring-fenced money from its Housing Revenue Account, the council’s investment…”, yep, they are calling it an investment, “… in these Longheath Gardens properties will be £3.6million instead of the original total of £6million. This is because each home will cost £150,000 rather than £250,000 as a result of a £100,000 grant per property from the Mayor of London and the Greater London Authority.”
And the people behind this nonsense have been placed in charge of running our borough.
The figures ought to prompt some investigation of Brick by Brick’s build costs, too: £250,000 each for 24 flats might seem less than competitive, especially since the developers, Brick by Brick, got the land at such a huge discount.
“This decision is important because it ensures more local people on our waiting list will get a new council home of their own,” Butler was quoted as saying.
“These top-quality 24 homes are part of a wider Brick By Brick programme that is boosting much-needed supply of housing for Croydon residents, and I look forward to even more completions soon.”
Under Butler, Croydon Council’s housing waiting list has risen to 5,000 households. Once they are completed, Longheath Gardens will bring the total number of council homes built under Croydon’s Labour council since 2014 to 27.
- Read more on the council’s huge subsidies for Brick by Brick: Massive discounts on land sales raise more questions
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