CROYDON IN CRISIS: Research conducted by a residents’ group has confirmed that more than 200 new homes, built with public cash by the council-owned company, remain vacant, in some cases for more than a year. EXCLUSIVE by STEVEN DOWNES and EMMA GARDINER
Despite the council having more than 5,000 on its housing waiting list, there are more than 330 homes around Croydon, all built with public money by Brick by Brick, that are today standing unoccupied.
In many cases, the homes have remained empty more than a year after their construction was completed. Flats on one site were first placed on the market as long ago as February 2020.
In several cases, complete buildings are standing empty, the homes inside never once lived in.
Given the still sky-high property prices in London, these homes could have a total estimated value on the open market of more than £110million. Or maybe more, given the inflated prices Brick by Brick has been asking for some of its flats.
A representative of the borough’s council tenants has told Inside Croydon that the situation is “an absolute disgrace”.
Some of the homes have been standing empty for so long, they have become subject to vandalism, while on at least one site, a security firm has had to be employed to protect against damage or squatters.
Many of the developments were completed months later than had been planned when Brick by Brick first brought forward the schemes. In some cases, the build was not finished until more than a year after the scheduled and budgeted date.
In the middle of a housing crisis, the failure to make good use of these properties adds a perverse mystery to the toxic legacy created by Brick by Brick.
Brick by Brick is the council-owned housing company, established in 2015, that was lent £200million but failed to repay a penny and was cited as a prime cause of the council going bankrupt in 2020. Meanwhile, hundreds of new homes stand empty, a daily reminder of the failures of the council and its badly-run housing adventure.
The Regina Road Residents’ Support Group was formed following last year’s housing scandal in South Norwood. Their research has found a total of 206 units at eight Brick by Brick sites that remain unoccupied, despite construction having been completed long ago.
Soon to join those 206 could be the 128 flats in “Flyover Towers”, built on part of the Wandle Road car park, where contractors are slowly completing work on the 25-storey tower block sometimes referred to as Kindred House.
Most of the flats here – 68 of them on the upper floors – are meant for money-spinning private sale, with the rest being classified as “affordable”, intended to be offered for what is in reality unaffordable shared ownership.
None of the 128 properties in Flyover Towers were shown as being “available” on the Brick by Brick website today.
The total of 334 properties found in the survey to be vacant do not include the 10 three-bedroom houses on the Tollers Lane Estate in Old Coulsdon which, as Inside Croydon reported last month, were recently bought by the council in a secretive £5.3million deal, using funds from the Housing Revenue Account.
The Tollers Lane scheme was among the first Brick by Brick projects to be given planning permission in 2017.
The houses and some flats were built on public open spaces, old garages and kids’ playgrounds sited in between existing council-built homes. It was these often small or awkward in-fill sites where brash Brick by Brick, and its gormless managing director Colm Lacey, boasted that the novice building company could develop successfully where established and experienced builders left well alone.
Brick by Brick’s Tollers Lane houses, intended for private sale, took nearly four years to build and did not go on the market until autumn 2021. After more than six months, the 10 terraced houses had failed to attract private buyers, and were bought by Croydon Council in April 2022.
The generous valuation put on these Brick by Brick houses, as the company is being wound down from operation, remains a point of some contention and suspicion at the Town Hall.
The use of yet more public money to bolster the failed housing company’s bottom line has not passed without criticism. At least one previous attempt by the council to off-load some of Brick by Brick’s unsaleable properties got blocked by government officials and external auditors, suspicious of the “circular nature” of the financial arrangements, when the then Labour-controlled council was seeking to spend millions of pounds of public money to buy property it had effectively already paid for.
Elsewhere in Coulsdon, the long delays in completing 157 homes on a former public car park on Lion Green Road have prompted further rumour and speculation that the properties were about to be unloaded, in a fire-sale job lot, to house social tenants from Lambeth and Lewisham.
The area’s MP, Chris Philp, was forced to issue a statement to scotch the rumours, with the council and Brick by Brick denying that they had “entered into any discussions with Lambeth or Lewisham councils regarding potential sale or occupation by those councils’ residents”.
But Croydon Council’s statement to Philp did include a weasel-like caveat: “However, given that some of the homes will be sold privately, and some will be allocated by a third-party affordable housing provider, the council cannot determine who these homes will be sold to.” So expect a housing association from Lambeth or Lewisham to announce it has bought flats in Coulsdon some time soon…
The council also stated that, “In connection with the affordable rent units, the council are currently looking at the possibility of acquiring these units for affordable housing for Croydon residents.”
But Croydon Council and Brick by Brick have been less forthcoming about the fate of other completed buildings that remain empty.
In some cases, the official explanation offered has been a vague “planning issues” brush-off for curious councillors.
At Pimp House, by Norwood Junction, where only two flats are occupied out of the 14 built above what was supposed to be a new public library, the council’s building control officials have declared the block to be a danger to the public after bricks and masonry started to fall from the recently completed building.
Delays in occupying many of the other properties are believed to involve continuing issues over Brick by Brick’s incompetent management’s failure to get the company licensed to sell shared ownership properties.
In the study, conducted over the first four months of this year, Regina Road Support Group’s research involved visiting each BxB site and, in most cases, checking door-to-door whether individual properties were currently occupied or not.
They found the following:
- Pump House, Norwood Junction: 12 vacant/14 units
- Warminster Road: 6/6
- Northbrook Road: 6/11
- Faithful Court, Upper Norwood: 1/9
- Drummond Road: 28/28
- Heathfield Gardens, South Croydon: 20/20
- Thorneloe Gardens, Waddon: 10/10
- Lion Green Road, Coulsdon: 157/157
In the case of Drummond Road, the flats there were first marketed two and half years ago.
“Designed by Stirling Prize-winning practice Mikhail Riches, the 28 beautiful new homes are set across two blocks, and include one- and two-bedroom apartments and maisonettes,” drools the Brick by Brick description.
“Each home has its own private outside space, either a balcony or garden, and there’s a shared roof terrace within one block, with views to the Old Town skyline.” Nice.
What they fail to state is that one block looks straight out on to Church Street, with trams running past every few minutes. Flats there offer views over what was once the Reeves Corner furniture store, until it was razed to the ground in the riots of August 2011. Now, after being abandoned for more than a decade, that site is nothing more than a derelict dumping ground and eyesore.
Ground floor windows of one of the Drummond Road blocks have been smashed, with wooden boards put up as a temporary measure, perhaps intended to keep out squatters or some of the homeless people and street drinkers who use the benches outside the building most days.
This might explain why West Wickham-based Black and Blanc, the latest agents appointed to handle the Drummond Road sales for Brick by Brick, say that while some of the homes have been reserved, others remain available, with two-bed apartments for sale for an eye-watering £430,000 to £460,000.
Brick by Brick’s expensive builds may also be an issue at Heathfield Gardens, off Coombe Road.
Another of Brick by Brick’s “in-fill sites”, the 20 flats were built on council-owned land, the site of existing residents’ green space and old garages. It is now eighteen months since Brick by Brick announced the completion of building work on the site, yet no one has moved into any of the homes.
A security firm has been had to be hired to protect the site. Contractors have visited over recent months to deal with “snagging” issues, while neighbours refer to “legal matters” causing the delays in occupation.
It was in January 2020, after Brick by Brick had been operating for almost five years, that Inside Croydon first revealed that while most of the company’s “affordable” housing was meant to be available under shared ownership, their execs had failed to register to be licensed to sell shared ownership properties. As a consequence, eager buyers were stung for thousands of pounds in legal and conveyancing costs when their mortgage providers refused to lend on the Brick by Brick properties.
Although a deal was later announced with a properly registered shared ownership provider to take on the handling of the BxB properties, the issue does not appear to have been entirely resolved.
All of the new homes in Heathfield Gardens were intended for shared ownership.
The Brick by Brick website today lists three two-bedroom flats as reserved and two as available. Asking price: £440,000, or £110,000 for a 25per cent “share”. Neighbours who have sneaked a look inside say “you couldn’t swing a cat in there”.
According to one local, “I don’t think they can sell them, they are too expensive.”
With a tranche of high-priced and some faulty new builds, the winding-up of Brick by Brick, which was expected to be completed by the end of this year could yet take much longer than had been hoped.
Those close to the housing sector in Croydon are now calling for the vacant Brick by Brick homes to be used for social housing.
Les Parry is the tenant member of the council’s Housing Improvement Board, established in the aftermath of the Regina Road scandal last year. Today, he told Inside Croydon, “The amount of Brick by Brick homes left vacant is an absolute disgrace.
“This situation is due to failed political leadership by Labour and very poor management at the council. The result being that we have families in both temporary and overcrowded accommodation that need to move, relocation of Regina Road families and an ever-growing waiting list.
“These vacant properties should become social housing immediately,” Parry said.
Read more: Council slips through £5m deal to buy Brick by Brick houses
Read more: Council sells off public green space to Brick by Brick for just £1
Read more: Council set to take £100m hit as it winds down Brick by Brick
Read more: Conflicts of interest, incomplete contracts, unlawful payments
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Remember the situation is now dire for the purchase of these properties since Help to Buy is being withdrawn. In fact Gove has brought forward the termination date of the scheme to October this year.
The possibility is these properties will be bought out by another social housing provider, but who in their right mind will not be looking for massive discounts to the apparent selling price to take these of the Brick by Brick clowns’ hands.
It would be a really useful exercise if someone familiar with accountancy and development projects could provide a line-by-line assessment of all the subsidies received by Brick by Brick throughout its existence, from the low-ball property “sales” from the council, including some sites for a mere £1, to various multi-million-pound grants provided by the Mayor of London and other agencies, and including the developers’ subsidy, Help to Buy.
With all that public help – and council loans provided at historically low interest rates – it all suggests that Brick by Brick’s development costs must have been huge for them to be trying to sell relatively modest-sized properties in not always prime locations at the top-end of the price scale.
When local authorities were in-house providers they would have their own specialist housing accountancy teams to undertake this service, but clearly this financial control has broken down in the era of localism and outsourced service providers.
The whole essential problem with the Brick by Brick debacle is that there appears to never have been an effective financial management system in place during its whole calamitous operation.
This doesn’t mean it is not beyond the possibilities of endeavour with a decent forensic accountant retracing all the transactions and piecing this together, The problem with Croydon seems to be they never want to find out what went wrong and allocate responsibility for negligence, because this seems so widespread throughout the Councillors and Officers.
There’s a strong possibility that the council does have the figures, carefully worked out. THey just won’t make them public.
Don’t you remember all those glossy BxB business plans presented to scrutiny committees with all the important things, like the numbers, redacted?
And it might be a little strong to suggest there were no financial controls during the “whole calamitous operation”. But certainly for the two years to 2020, Colm Lacey – who still maintains that the business that bankrupted the borough was in fact a success – was running BxB without any finance director.
I vaguely remember meetings of the Scrutiny Committee you reported and when asked for detailed construction and financial data Mr Lacey stated he was unable to provide them. Instead of jumping up and down and asking why not the Committee accepted his inadequate excuses and did not pursue the matter. Doesn’t that suggest the inadequacy of the management controls provided by Brick by Brick?
Committee members jumped up and down about it.
But the committee chair, Sean Fitzsimons let the matter pass…
I totally agree. The whole lot should have a commercial forensic examination. Audit should be examining every single persons remit in authorising any part. Government Inspectors should be examining all Council Executives and Councillors actions in the matter and identify why controls failed were subverted or were inadequate.
Sorry they did not jump up and down. They could have individually pursued the transgression of financial affairs. They receive advice to pursue best practice and the opposition could have relentlessly pursued this failure in general council meetings and the media at the time. They muttered and moaned. There never was any effective opposition at the time when it mattered.
Derek, you really ought to have learned by now.
It makes not a jot of difference what a councillor, in the majority group or opposition, does. Jumping up and down and screaming, even.
Those in power, real power, are the council officials, exec directors (or whatever they are calling themselves this week) who make the decisions and get them rubber-stamped at council meetings. If they don’t want you to know something, they just withhold the information – even from elected councillors.
This is outrageous! The council should claim these buildings due to the unpaid loans by Brick by Brick and use them for social housing. They’re priced way too high, who would want to buy them for the price being asked. To me it’s the only way the money will be anyway repaid is to claim the properties back as council owned.
Croydon Council should have control of the properties, not selling them off cheap for other boroughs to house their residents. Croydon people paid for the houses and it should be people living in our borough that benefit from more social housing. Local council tax payers should lobby the mayor to make sure this happens.
Montpelier road sites one block of flats has been empty for over a year
How many flats, Tony?
If Croydon Council built a brewery and lined it with the finest beers there’s no way they would be able to get anybody drinking in it.
If Croydon Council planned to build a Brewery it would struggle to get any reputable brewer to work there.
But if it had to go through that Planning department We would probably end up with a chemical plant of toxic waste that would be undrinkable. It would be done by Cowboy Builders with materials of untraceable origin paid for in cash with no receipts being registered by the Builder at Companies house. All the conditions imposed by planning will never be checked and the building despite failing building regulations will be signed of as conditions discharged again with no one visiting – It will be allowed to open for business and produce toxic waste at 20 times the level of normal chemical factories in china and will pollute the whole area. It would sadly be required to impose a restriction of being a car free development to obtain cash for its traffic fund – but do not be put off by that as it will not be enforced in any reasonable way and all attendees can have as many cars lorries 16 wheel articulated lorries (ignore the 7.5t sign and no right turn) as they want and traffic chaos will ensue. Do not bother with parking bays slap it in remove reg plates stick one on dash but obscure a couple of letters – no line no fine – Police say its a parking issue Council say its a Police issue – permits nah can’t have one just borrow a relations or visitors – no worries.
But it would all be part of a perfectly legal development!
Sadly that pesky uncorruptable trading standards and environmental health departments might (would) not issue permits or Licences. Ooops
So – it can still be used by the Council for toxic Social Housing but may end up being used by private Landlords tenants who for key money will allow a re-purposing to the newest Brothel, Crack house or general gang den. (Might even be able to squeeze a bit of toxic waste disposal in the guests Bong’s)
Do not worry about the Neighbors – they can leave, sell up, move out, expire from exposure to toxins, multiple assault or prevention of access to emergency medical treatment and make more space for the Councils social engineering project.
Yes In the parlance of our respected Met – this lot got form!
Could part of the problem be the move to home working? There is probably less demand for properties within commuting distance of central London and people are buying cheaper or larger properties outside the M25 rather than the rabbit hutches on problem sites that BxB have built. The three most important factors in property purchase (location, location and location) still hold good.
First off let me say well done to the Regina Road Residents’ Support Group and all who spent their time in looking at this matter. They have and are doing a great service for Croydon Residents. We do need more people doing this for Residents and Neighborhoods. Again this is a shocking indictment of what the Council not only have been up to but what in effect is being allowed to continue by the current regime.
I suspect though that most of those ”completed” residences are not actually complete nor fit for habitation as social housing or have ”building regulations issues” along with problems planning are having to do ”retrospective planning” adjustments on the quiet.
But yes they when fit should not be sold off.
One can see the benefits of rental income from them of at least £250k a month – in time the capital cost will rise to recoup costs. Doing so would also defray costs of re-housing families privately and in Hotels
I suspect with the convoluted and ring fenced methods of accounting that profit would go towards paying the debt or other ”priorities” of this regime. Perhaps Mr Perry can request that this is looked at and reported on in a public meeting of the Council?
At the General Election voters will want to ask the Croydon Labour MP’s what they did to challenge the errors that the Labour council were consistently making.
Don’t hold your breath, Sarah Jones has failed in every post she has held so far.