Brick by Brick was ahead of the trend for building unsellable, over-priced shared ownership homes. By BARRATT HOLMES, housing correspondent
Cash blocks: L&Q invested £62m in two of the ‘Queen’s Quarter’ tower blocks
Croydon’s Brick by Brick is not the only housing business that appears to be struggling to off-load its stock of expensively built “executive apartments” through far-from-affordable shared ownership schemes.
Housing Association L&Q has more than 1,000 unsold shared ownership homes on its books, with 100 remaining unsold a year after they were built, according to their latest results just published.
L&Q has nearly 120,000 homes under its management, including interests in several developments in and around Croydon, such as its £62million investment in 172 homes in two blocks on the site of the former council offices, Taberner House, which they are now calling “the Queen’s Quarter”.
There, three-bedroomed flats are being listed for sale on shared ownership terms at £500,000 full market price.
Brick by Brick is the council-owned failed housing developer whose lack of profits, and £200million borrowing from the Town Hall, was a major factor in bankrupting the borough in 2020 and bringing down the council regime of Jo “Negreedy” Negrini, the CEO, and Labour leader Tony “Soprano” Newman.
Last year, outside consultants were brought in to carry out the process of folding the Brick by Brick business.
This June, Inside Croydon reported how there were more than 330 homes around Croydon, all built with public money by Brick by Brick, which were 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.
Surfeit of supply: in the middle of a housing crisis for many, housing associations such as L&Q are struggling to find takers for their over-priced shared ownership flats
The empty BxB homes were estimated to be worth at least £110million, with more Brick by Brick flats soon to come on the market with still-to-be-completed projects such as Flyover Towers (also known as Kindred House).
There was an added, special Croydon Council complication over BxB’s shared ownership homes.
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.
There’s no such excuses for L&Q, however.
According to its latest trading statement published last week, L&Q has more than 1,500 unsold homes with a combined development value of almost £250million as of June 30.
Flyover Towers: nearly four years since work began on the Wandle Road car park site, this 128-flat, 25-storey Brick by Brick block is still not finished
The update showed that more than 70per cent of homes were left unsold for longer than a month after being completed. More than 10per cent – 150 homes – had been left unsold for more than a year.
According to a report on specialist website Inside Housing, “The vast majority of those, 107, were classed as shared ownership homes.”
In total, L&Q had 1,068 unsold shared ownership homes, with 343 unsold after six months.
What we appear to be seeing is a glut of high-specification, small-sized new homes coming on to the market at prices few hard-working families are able to afford or willing to pay for, even on a shared ownership basis.
Shared ownership has been used by profit-hungry developers, enjoying the government subsidy of Help to Buy, to fill their “affordable” housing quotas.
The majority of council-owned Brick by Brick’s 50per cent affordable housing target was intended for shared ownership.
The harsh reality is that shared ownership is far from affordable.
Releasing its figures, L&Q said its unsold housing reflected “a high quantity of handovers of shared ownership properties in some of our London-based schemes”.
High-rise prices: some L&Q flats in the Queen’s Quarter in Croydon have a full market sale price of £500,000
It said there were no plans to make changes to its model and they claimed that demand for shared ownership remained high. L&Q says that 807 completed homes in the past year were for social housing, with another 488 sold on the open market.
Operating surplus for the quarter stood at £89million, down from £112million in the previous year. Sales as a percentage of turnover stood at 47per cent of L&Q’s revenues.
“It is important to note that, of the total unsold stock, 30per cent has been held for less than one month and over half of the entire unsold stock has been on the market for under three months,” said L&Q director Martin Watts.
“Sales demand, including for shared ownership, remains strong and we are confident that homebuyers will continue to recognise the high quality and standards of L&Q developments.
“We remain fully committed to our vision, that everyone deserves a quality home which provides them with the opportunity to live a better life, and shared ownership is one of the best and most accessible ways to become a homeowner. We therefore have no plans to make any changes to our shared ownership offer and will continue to create homes and neighbourhoods that everyone can be proud of.”
So there.
Read more: ‘Disgrace’ as £110m of Brick by Brick homes stand empty
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
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