Council bosses insist their plan to build 3,000 homes remains on track despite a “significant number” of projects being stalled by spiralling costs.
Haringey Council’s housing chief is “quite confident” of meeting the target even though higher construction and borrowing costs have made several schemes financially unviable.
The authority pledged to build 3,000 homes for council rent by 2031 after launching a major construction drive in 2018.
READ MORE: Man who poisoned fox cub in bin after catching it in rat trap guilty of cruelty But inflation in the construction sector has since risen sharply and recent interest rate hikes have pushed up the cost of borrowing needed to fund the schemes.
Council reports say a “significant number” of projects that are not already in contract have been paused or delayed because they are not financially viable.
Despite the financial squeeze, the council says that on the “current trajectory” it will meet its target, with work “already completed or begun on 2,027 homes as of August 2023”. The reports add that 199 homes have already been finished and occupied.
Speaking at a meeting of the council’s housing, planning and development scrutiny panel on Wednesday, cabinet member for housebuilding Cllr Ruth Gordon said: “We feel quite confident that we can deliver the 3,000 homes. We have got more sites that are available than just for 3,000. It obviously does depend on the economic climate.”
Last year, the council switched 870 homes in its housebuilding programme from lower-cost formula rents to higher London Affordable Rent levels to ensure its plans remained affordable.
READ MORE: DJ Koray Alpergin was ‘tortured to death in empty wine bar’, court told Council reports reveal that some of its construction contracts have been terminated after contractors went bankrupt, meaning new firms had to be appointed.
After panel members raised concerns over financial viability, Robbie Erbmann, the council’s assistant director for housing, said that even with the “fairly unusual” recent economic conditions “we are still pretty confident that the housing delivery is affordable”.
He added: “We are not making any plans to mothball any of our schemes on site. The HRA [housing revenue account] business plan can support them.”
Mr Erbmann said construction costs had recently started to come down, adding that conditions were “tough” but the housing programme was “just about viable”.
According to the reports, construction of 2,027 council homes has begun across 41 sites. Panel chair Alexandra Worrell asked if the definition of starts on site could encourage “tokenistic” starts involving putting in foundations “to say that we have X-number of homes”.
Robbie said some projects needed to begin by a certain date “to satisfy funding conditions”. He denied any starts were tokenistic but acknowledged that some had “progressed more rapidly through the stages of construction than others”.
Cllr Gordon said she was “very proud” of the housebuilding programme, claiming the council was “leading the way in London”.
However, she acknowledged that there are 12,500 households on the borough’s housing waiting list, so that by building 3,000 homes “we are still only nibbling away at that”.