CROYDON COMMENTARY: In our first public platform article of 2023, former MP and Mayoral candidate ANDREW PELLING, pictured right, says that it is essential to get maximum value from the cash-strapped council’s assets – and having more than a single bidder would help achieve that goal
Mayor Jason Perry’s Conservative administration at Croydon Town Hall will claim that it is trying its best to recover the council’s finances, even if it has already thrown in the towel by declaring bankruptcy again for the financial year that begins in April 2023.
The line that Perry and the Conservative group has taken has partly been that they are distracted by still finding yet more hidden financial howlers like the £40million misplaced from money belonging to the Housing Revenue Account, supposed solely for the use for council tenants. I wonder whether Labour canvassers are mentioning that sleight of hand to council tenants on the doorstep?
With the council saying it will be a “minimal council” in future and that it wants special permission to increase council tax by 10per cent or more from April (Croydon is already the third highest council tax in Greater London), there is a very real responsibility to maximise the value of any public assets that the council sells.
So in the case of the disposal of the Brick by Brick-built flats at Lion Green Lane in Coulsdon, I hope that we will be assured that there was a competitive process for this putative sale to the Notting Hill Genesis Housing Association.
The Conservatives have found that, before they took power last May, there was a habit of borough officials only going to one bidder when they had council properties to sell. So let’s hope they have changed that in this case.
For a council in such severe financial difficulties, I was very disappointed to see the new Conservative council surrender all the remaining Brick by Brick planning approvals, which will have had very significant value.
I know that these approvals were controversial, but they are not as controversial as the Conservative council promising at the election to sort out the council’s finances before hoisting the white flag just six months later and saying that Council Tax will be supercharged for only the most minimal of services. Hardly the usual Conservative line of standing for value for money.
As far as Lion Green Lane’s 157 flats are concerned, I feel that the minimum that the council should take for these properties is £33million.
I set out below very conservative valuations taking account of local flat prices, but also any BxB “legacy” problems.
The open land between the blocks of flats might lead to challenges of anti-social behaviour in this town centre location; the design leaves questions of who has responsibility for the bits of the land between the five blocks. This depresses a valuation. The council’s Place Review Panel of the great and the good of designers and architects highlighted that very issue.
Of course for a developer, and housing associations are very much developers these days, there might be a chance for further development between the properties in the future. Maybe a sixth block after a full planning permission and much more quickly adding two floors on top under permitted development rather than through a full formal planning permission. This is another bonus reason for a minimum £33million value, although an overage clause would be needed to cover that benefit to the buyer if realised.
The location in the Coulsdon town centre and near Coulsdon South station is attractive, adding to the properties’ value.
So here are some cautious low valuations for the 157 units, with nomination rights for all the “affordable” rented properties.
B = bedroom number P = expected number of residents
78 units for private sale
49 1B 2P x £225,000 = £11,025,000
9 2B 3P x £275,000 = £2,475,000
11 2B 4P x £300,000 = £ 3,300,000
9 3B 5P X £425,000 = £ 3,825,000
46 Shared ownership
30 1B 2P x £205,000 = £4,100,000
6 2B 3P x £250,000 = £ 1,500,000
5 2B 4P x £270,000 = £1,350,000
5 3B 5P x £380,000 = £1,900,000
Maximum household income for shared ownership buyers is £90,000 a year, which is nice, but shows how unaffordable property is these days.
33 units for rent at “affordable” 80% of market rate
17 1B 2P x £180,000 = £3,060,000
5 2B 3P x £ 220,000 = £1,100,000
6 2B 4P x £240,000 = £1,440,000
5 3B 5P X £340,000 = £ 1,700,000
Total value £36,775,000 less a 10per cent discount to Notting Hill Genesis for a one go volume purchase, which brings us to £33,097,500.
There are questions about the liability for Section 106 payments, financial contributions promised at the time that planning permission was granted. It is uncertain whether Brick by Brick has ever paid these planning levies.
That liability, money due to the council after an expensive link to RPI, could be as high as £380,000, plus £10,438 to pay the council for “monitoring costs” of the original agreement between BxB and the council (both at the Fisher’s Folly address, by the way). Not that there was ever any real monitoring of Brick by Brick by the council.
Under the terms of the S106 planning agreements, a free car club needs to be provided for three years and maintained for five years. Brick by Brick were supposed to have this in place before any new owners or tenants moved in to their homes at “Red Clover Gardens”.
If Brick by Brick has not sorted these matters, then they need paying, too.
And a thought about prospective buyers Notting Hill Genesis.
Inside Housing reported in April that the Housing Ombudsman chose to highlight four of its findings, in the context of the national interest in rented housing conditions after the Regina Road scandal. One of those four highlighted cases was regarding Notting Hill Genesis where a “complaint from a group of leaseholders of Notting Hill Genesis about communal defects and repairs.
“The landlord had agreed to appoint independent surveyors to assess the defects but delayed this for more than a year.
“It did not acknowledge this failure in its complaints process and also delayed in progressing a resolution to the issues.
“The Ombudsman made a finding of maladministration by the landlord for the response to the residents’ request for an independent surveyor assessment.”
It is not clear to me as we head into 2023 that the culture at Croydon Council has really changed at all or that Mayor Perry’s Conservative administration has ambitions to change the culture, as it struggles with the task in hand of worsening financial troubles.
The determined hiding of financial difficulties is one of the reasons why at least £169million of Croydon Council Tax-payers’ money was lost by the previous Labour administration, and they should never be allowed any where near the council’s money again.
Let us hope that the council and the Red Clover Gardens buyer will be quick in releasing the final agreed sale figure, before it finds its way later to the Land Registry.
And let’s hope that the figure is at least £33million, plus all the other costs and planning levies.
Read more: Tory blame game over bankruptcy points finger at Westminster
Read more: Council forced to issue 3rd bankruptcy notice in just two years
Read more: After nearly a year, Gove is sitting on two ‘improvement’ reports
- Mayoral candidate Andrew Pelling was a Labour councillor from 2014 to 2022, when he was expelled from the party. He has previously been a Croydon councillor, London Assembly Member and MP for the Conservatives
Croydon Commentary provides a platform for any of our readers to offer their personal views about what matters to them in and around the borough. To submit an article for publication, just email us at firstname.lastname@example.org, or post your comment to an Inside Croydon article that has caught your attention
- Inside Croydon – as seen on TV! – has been delivering local community news since 2010. 3million page views per year in 2020, 2021 and 2022.
- If you want real journalism, actually based in the borough, you should consider paying for it. Please sign up today. Click here for more details
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at email@example.com
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
- Inside Croydon is a member of the Independent Community News Network
- Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London