After five years of planning, numerous schemes will be frozen for at least the next years
Numerous schemes in the Thames Gateway – the vast region east of London earmarked for an extensive regeneration programme – are on hold for the forseeable future. Construction has been stalled for some projects on site, and those on the drawing board are likely to stay there for the next four years. Developers, who based the financial viability of these projects on the property values of 2007, are expected to wait until 2011 for house prices to recover.
Speaking at the Thames Gateway Forum in London’s Excel Centre on 27 November, Andrew Storey, joint chief executive for the Greenwich Peninsula, admitted none of the projects on the drawing board for Greenwich Peninsula, the massive regeneration scheme around the O2 (formerly the Millennium Dome), would begin on site until values begin to climb back up.
‘House prices are now 20 per cent below where they were [when permission was granted in 2007], so we need to wait until they return to what they were before we can go ahead,’ says Storey of the project, which is backed by Quintain and Lend Lease.
According to UK house price growth predictions by property agent Jones Lang LaSalle, a return to 2007 levels will take five years. ‘And that,’ warns Storey, ‘assumes a recovery will start this time next year.’
As a result, the Terry Farrell-masterplanned Greenwich Peninsula could see nearly half a decade of inactivity. Numerous projects could be stalled, including a 305-home development by Flacq at Peninsula Central; a residential scheme by CF Møller; another by Patel Taylor Architects at Peninsula Quays; and a 207-home project with 40 per cent sustainable homes by Jestico + Whiles at Peninsula Parkside.
Jestico + Whiles director Heinz Richardson says the delays are ‘not a surprise in the context of the current climate’. Even schemes already under construction, it has emerged, are not immune. Storey admits that work on Stock Woolstencroft’s 229-apartment scheme for Bellway Homes next to the River Thames ‘has paused due to market conditions’.
The Greenwich Peninsula is not the only project to hit the buffers. During the forum, Steve McGuckin, head of Ebbsfleet Valley Land Securities, announced that the next planned phase of residential development Castle Hill in the Kent region has been mothballed. Architects S333, Proctor Matthews and London-based practice Space Craft are all involved, working to a masterplan by Barton Willmore.
Space Craft managing director Cody Gaynor says the scheme ‘is on ice, not put off’, but confirms that work was halted even before reaching detailed planning stage.
The housing crash also impacts linked schemes, where privately backed houses are expected to fund other facilities. Havering Council recently had to ‘reaffirm its commitment’ to a leisure development in Romford. It said: ‘The worldwide credit crunch has resulted in dropping property prices, which means the proposed new homes will not sufficiently fund the redevelopment of the leisure complex. The council has since suspended the development until property prices rise.’
On Barking Riverside, a mixed-use development along 2km of Thames waterfront, project director Clive Wilding and Elliot Lipton, managing director of developer First Base, are trying to remain upbeat. Wilding insists progress is ‘dependent on individual circumstances and land values’. He adds that much of the low-rise family housing development in Barking is backed by English Partnerships (now the Homes and Communities Agency), ‘which may be prepared to take less profit in order to stimulate growth’.
This joint venture between Barking Riverside, Bellway Homes and the Homes and Communities Agency will, maintains Wilding, ‘have a reserved matter application in by Christmas’ for 4,000 new homes, 44 per cent of which are three-bedroom houses, rather than flats.
According to Jeremy Grint, head of spatial development at Barking and Dagenham, things will keep ‘moving in the area’. But he adds that ‘if the Docklands Light Railway extension does not go ahead it may mean that Barking Riverside will only be able to take 1,500 homes’.
The London borough has recently submitted two planning applications for a development on the edge of Barking town centre – a joint venture between Barking and Dagenham Local Housing Company, the council and First Base – which has 470 housing units in total and 96 in the first phase.
Chris Tapp, partner at RMA Architects, says the firm’s Lanrick Road housing project in London’s Tower Hamlets, which has just received planning permission, is still going ahead. ‘We have an agreement with the client for working drawings,’ says Tapp. But, he adds, ‘we have yet to be instructed to proceed until there is a greater certainty in the market; either through completing a certain level of market sales or agreeing contracts with a housing association.’
Elsewhere, delays are being used to improve designs already on the drawing board.
Brian Weddell, head of Medway Renaissance, the regeneration arm of Medway Council, said its 600-unit Rochester Riverside project by HTA Architects and Burd Haward was a year away from detailed planning but the timescale ‘was being tweaked’.
HTA project director Simon Bayliss speaks for many when he says that while there are opportunities in the Thames Gateway, ‘[there] are still a lot of challenges to get the economic conditions right to continue developing it’.