Kew Bridge Development Generates Close to £250million
Developer claimed reduced affordable homes portion because of fears about profitability
Housing developer St George made revenues of over £250 million on a Kew Bridge development even though it had persuaded Hounslow Council to allow a reduced portion of affordable homes due to fears about the profitability of the scheme. The money raised by the scheme was nearly double what the developer told the Council they were likely to achieve.
The numbers were gathered by the Guardian newspaper who reported that the Berkeley Group which owns St George has repeatedly told planning authorities that they couldn't deliver the borough's target proportion of affordable housing because they wouldn't be able to make a profit.
For its Kew Bridge development, Hounslow Council accepted that Berkeley could only build 20% of a 308-unit scheme as affordable which was half the local authority’s target.
Building the number of units required by the target, Berkeley stated in a planning agreement, would mean the scheme would be £24.6million in deficit. Berkeley told Hounslow that house sales would generate £132million. Berkeley did agree to make an extra payment to Hounslow capped at £8.3million in the event of the scheme performing well. According to The Guardian, Land Registry data suggest that the scheme generated close to £250million, with one apartment selling for £4.55million.
Land Registry data also suggests a total of £358million sales came from 71 homes in the Ebury Square development but Berkeley only paid £1.6million towards low-cost housing elsewhere in Westminster without building any affordable homes.
While pleading squeezed margins Berkeley has made £2.9billion profit over the past seven years and its chairman Tony Pidgley has earned over £174million over the past decade.
A spokesman for the company said, “Berkeley has a sustainable, successful business model that enables it to perform well throughout the economic cycle, as demonstrated by its results of recent years and creation of fantastic new communities and long term value. We are justly proud of our track record in building 10% of London’s much-needed private and affordable homes.
“Last year alone, Berkeley contributed more than £400m of subsidy for affordable housing and wider community and infrastructure projects, which has helped us be recognised as London and the south-east’s leading place-maker. Sales utilising Help to Buy are a very small part of Berkeley’s sales.”
September 8, 2018