Megaprofits at the Megabowl?

Photo of former Lambeth LibDems councillor Jeremy Clyne who has campaigned for a good Megabowl developmentFormer Lib Dem Councillor Jeremy Clyne has won a ground-breaking Freedom of Information battle with Lambeth Council over the Megabowl Development.

The Council allowed developer London Square to provide only 15.8% affordable housing, instead of their usual requirement of 40% in the development because it was claimed the scheme would not be viable with a higher proportion based on the market price of the properties.  Before the application went before Lambeth Planning Committee, Jeremy Clyne asked the Council to provide the viability reports that justified the low level of affordable housing and cultural facilities, but his Freedom of Information request of February 2015 was refused on the grounds of commercial sensitivity and that disclosure would endanger the development.   

A version of the viability reports compiled by consultants for London Square, but with key data blacked out, was provided. The Information Commission rejected Jeremy Clyne's complaint about this, so he took the case to a full Information Tribunal hearing, and representing himself, took on the Council, its legal team, head of planning and external viability expert and won. The Tribunal ruled that the public interest in disclosure of the viability study over-rode the public interest in preserving confidentiality.

 The judgement stated, “We have not seen anything that supports the Council’s conclusion that disclosure of the information would have imperilled London Square’s proposed redevelopment of the Megabowl site by weakening its commercial position.”
“There is no doubt that affordable housing is of high public interest, and a premise of Information Rights is that there is value in the public having full opportunity to receive and review the information underlying policy choices and decisions."  

Jeremy Clyne commented, “The public has a right to know why schemes that seem to be riding on a speculative property bubble are not providing homes that people can afford to live in and the facilities that local people need and are demanding.” He has now received the viability reports by Lambeth's consultants, which have revealed the projected average sale prices of flats in the development:
Studios     £281,579
1-bedrooms     £387,654
2-bedrooms     £521,595
3-bedrooms     £729,583
4-beds - £810,500

Marketing of the flats in China Malaysia and the Middle East in 2015 preceded the UK sales launch this July. A 2015 article in the South China Morning Post aiming at Chinese buyers seeking "offshore havens for their money" gave special mention to the Streatham Hill flats; “Developer London Square has interest from local and Chinese buyers at its scheme Streatham Hill.” House price growth of 31 per cent across London between 2015 and 2019,” was predicted, “with areas like Streatham in the vanguard.”

Current price lists appear to show units on the market at levels significantly higher than the projected figures in the viability assessment for the same flats, indicating that the development has become much more profitable since when Lambeth permitted such an exceptionally low percentage of affordable housing.   

The Council included a review mechanism when granting planning permission, but it was only designed to come into effect if the development didn't start within a year of planning permission being granted. No provision was included whereby the viability and profitability of the scheme could be reassessed based on actual sales values.  Jeremy Clyne informed us that at the Tribunal Lambeth told the Judge that the developer had rejected such a review mechanism and the Council had not insisted on one. The scheme was projected to make a 17.5% profit, apparently an industry standard amount accepted by the Council.   With higher than predicted sales prices it would be interesting to know how much greater the profits actually are.

 It is important to investigate and learn from this case and hold Lambeth Council to account.  Jeremy Clyne's achievement is already being used by campaigners challenging the Council over other developments. The Council refused to release viability information about the huge Lambeth Town Hall redevelopment, but the Information Commissioner, reversing its previous stance, has ordered them to disclose the documents, citing the previous “Clyne decision” from the Tribunal. 
 
We very much welcome the regeneration effect created by such developments as the London Square scheme, but we call upon councillors on the planning committee to investigate thoroughly viability assessments, particularly where developers are permitted to provide reduced levels of affordable housing and social infrastructure against the Council's policy requirements.

Photo of the frontage of Streatham Hill's Megabowl development

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