Our housing correspondent, BARRATT HOLMES, on the council’s increasingly desperate efforts to flog off the last developments from its inept house-builder
Flyover Towers, the final development by Brick by Brick, Croydon Council’s bankrupting building firm, has been sold as a job lot.
The deal could see previous plans to provide some social housing in the building abandoned completely, with the council appearing to have given up on securing sales through shared ownership schemes.
A senior source at the Town Hall has confirmed that, “We have exchanged contracts but not yet completed” on the building, which is sometimes referred to as Kindred House.
The property disposal is part of the cash-strapped council’s increasingly desperate efforts to generate cash from its assets following its financial collapse in 2020, which was caused in large part because of the failures of Brick by Brick.
As Inside Croydon revealed exclusively last year, Brick by Brick’s other late-to-complete development, the 157 flats in five blocks on a former car park at Lion Green Road, Coulsdon, have been sold to one of the country’s biggest housing associations – Notting Hill Genesis. Final negotiations over the purchase price are continuing.
Flyover Towers has been built on part of the Wandle Road car park, next to the Croydon Flyover in the town centre. Builders were still on site this week – more than two years after the development was supposed to have been completed.
Council sources refuse to divulge who the prospective purchaser might be, or the purchase price, although Notting Hill Genesis has confirmed that it is not involved in this acquisition.
“It’s all confidential,” a Katharine Street source told Inside Croydon. “Until the sale is completed, we can’t put that info out. As soon as we do, we will.”
The source refused to answer questions about how many of the homes would be offered as social housing, at social rents, as had been intended under original plans five years ago.
Construction work on the 25-storey Flyover Towers began in 2019, in what was supposed to be a two-year build. Construction sources have confirmed that the covid lockdowns were only a minor part of the slow progress on the site. In common with all Brick by Brick-managed projects, the build went seriously over schedule, with cost over-runs likely.
At the planning stage, 68 of the block’s 128 flats were to be for private sale – estimated market value for these alone: £26million – with 19 offered as affordable rent and 41 for shared ownership.
Two-bedroom private flats in Kindred House with views directly across the Flyover were being advertised for sale in 2022 at an eye-watering £560,000. One-bed flats were on offer for £340,000. Given that BxB is now selling the whole block to one buyer, it is safe to assume that there were not any takers when the flats were previously marketed.
When Brick by Brick was founded in 2015, the then Labour-run council promised that half of all its homes across the borough would be “affordable”, with the other 50per cent of the homes built going for private sale to help subsidise the project.
It emerged that the majority of BxB’s “affordable” properties would in fact be sold as less-than-affordable shared ownership homes. This scheme fell through when it emerged that no one at inept Brick by Brick had bothered to get the company licensed as an approved vendor of shared ownership homes, leaving their prospective buyers high and dry and unable to secure their mortgages.
Following the council’s financial collapse in 2020 and the start of the winding-up process for Brick by Brick, a licensed shared ownership vendor, So Resi, was drafted in to handle the sales. This, though, appears to have been less than a full-throttle success.
As research for Inside Croydon discovered last summer, including Flyover Towers, Green Lion Road and other BxB properties around the borough, there were at least £110million-worth of new homes standing empty in Croydon.
In the middle of a housing crisis.
Many of those homes remain vacant today.
Brick by Brick’s failure ever to make a profit, or to repay its £200million-worth of loans from the council, was a major contributor to the council’s bankruptcy. It was not until March 2022 that Brick by Brick made its first “repayment”: £30million, covering interest and just £2million of its loans.
Because of the delays in completing the builds, the poor sales through So Resi and estate agents, it has now been conceded that the winding down process for Brick by Brick will continue for another 12 months.
Some members of BxB staff will continue to be employed until early 2024, adding further costs to the council’s exit strategy.
“There is a reasonably extended part where we have to have some staff,” Jason Cummings, the council cabinet member for finance, said.
“We have responsibilities to the builds. Brick by Brick won’t be operating as a company but there will still be a couple of staff doing that tying up process.”
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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