Major property investor Land Securities has pulled out of the Lewisham town centre redevelopment.
PropViews understands that at least three more major regeneration proposals are likely to be halted within the next six months as brownfield emergency creates political deadlock.
London’s pipeline under significant stress with renewed calls from the built environment for national intervention to protect jobs and growth.
LandSecs announcement
Yet more disappointing news for London as Land Securities withdrew its plans to bring forward an exciting and transformative comprehensive redevelopment of Lewisham town centre. The project, near a decade in the making, had outline consent for 1,700 built to rent homes and over 1,000 student and shared living studios. The proposals also included 98 social rented and over 200 discount rent homes.
The consent had been carefully crafted with the full support of the Lewisham team. LandSecs had risked significant speculative fees on designing a scheme contingent on a Lewisham CPO of the former Citibank Tower. The promoted scheme included a commercial understanding that Lewisham would help unlock this land once permission had been achieved.
However, it has emerged since the election that the new Green administration has refused to support this strategy. It sought to negotiate an increased number of social rented homes. With the scheme already under pressure, and GLA funding already stretched, LandSecs had no choice but to send the project into abortive mode.
PropViews understands that amongst senior officers there is significant discontent about the decision given the partnership work undertaken and the permission awarded. The work represents hundreds of Officer hours and effectively ends the prospect of wider public sector commitment into Lewisham through the extension of the Bakerloo Line in this political cycle.
Key questions facing London
London now faces a stark choice. Should a demonstratable lack of subsidy for subsidized housing mean that nothing should come forward? For this is what is happening in Boroughs like Lewisham and Southwark.
There is increasing recognition amongst policy makers that new development simply does not have value creation to support social housing and so if this is to be funded, either new money in the form of grant needs to be found or there needs to be a systemic review of the development system and a reduction in the oncosts that have been layered into the process over the last decade.
Getting to yes
Finally, it is patently evident that London Boroughs are not incentivized to deliver new homes, jobs and growth. Politicians have many vetoes. They have many incentives to use these vetoes. But there are too few rewards for saying yes. This makes them inclined to tactical decision making at the expense of long term strategy and city building.
The bypass mechanism created for City Hall almost makes it worse. Why? Because it means local politicians can push the trade offs onto the GLA. That’s not healthy either.
The rewards for growth need to be retained in the Boroughs that are inclined to say yes. This could be done through a slice of the extra income tax gained. It needs to be material and it needs to enable Councils to generate their own equity to invest into the development cycle. The longer the political deadlock and leadership gap in London lasts, the more investment projects will be lost. Politics should not make us poorer.
