Brexit warning over Camden’s flagship investment programme
Scrutiny committee ask whether stagnating property market will hit council
12 September, 2018 — By Richard Osley
Cabinet councillor Danny Beales
CAMDEN has been told to think of a “Plan B” amid concerns Brexit and an uncertain housing market could jeopardise its flagship policy of paying for new council homes and schools through property deals.
The future prospects of the Community Investment Programme (CIP), the council’s headline initiative over the past eight years, are being scrutinised amid warnings that the market is stagnating and could be hit further by the fallout from Britain’s divorce from Europe. The policy is partly based on being able to lever in investment through the sales of new flats created by the redevelopment projects on council-owned sites.
The strategy was first mapped out by the Labour council eight years ago when London’s housing market was continually on the rise and Camden’s portfolio of land and property was referred to as the council’s “North Sea oil”.
But backbench Labour councillor Rishi Madlani told a cross-party scrutiny committee last Tuesday that “the liquidity of the market is something that is a big problem”, adding: “It’s the uncertainty [of Brexit] that’s killing us and there will be further uncertainty come what may – that’s almost guaranteed.”
He said the government’s handling of Brexit had been “shambolic” and that there might still not be any clarity in the near future. Cllr Madlani added: “The fall in sterling, a lack of workers, the risings costs: we need to be exploring what is Plan B because we want to be ambitious.”
Camden’s director of development, Neil Vokes, said the council was being advised by market analysts and property agents Savills. “Their current advice to us is that we’ve probably seen a 2 per cent fall in sales prices last year, flattening this year and then you will over the next five years, roughly, see a 7 per cent increase,” he said. “So they are recognising the dip, they are recognising that for this year and next year, things will be slow but they are forecasting house prices to come back. Within all of that is the big caveat of Brexit and the general view that nobody knows the impact that that will have on the housing market.”
Labour councillor Rishi Madlani
Regeneration chief Councillor Danny Beales, the cabinet member now fronting the CIP, told the meeting: “I don’t think there is a need for a Plan B at this point,” adding that Camden had a “duty” to continue with the CIP. He said its schemes had been partly protected by being longer-phased projects that had been able to “ride through dips in the market” and that the most dramatic price falls were on luxury home developments.
While there has been neighbourhood opposition to the size of some schemes – such as the redevelopment of former council offices in West End Lane and a tower scheme drafted for Somers Town – the council is proud of the CIP for funding for community facilities at a time of straightened local government funding.
Cllr Beales acknowledged that the impact of Brexit needed to be assesed, but that Camden was looking at diversifying funding methods, including bidding for more money from the Mayor of London and more flexibility over how cash from right-to-buy sales are spent.
He added: “We definitely have to see what [Brexit] deal is reached and see what impact there is on the market. I think due to our long-term approach we are confident the schemes we are delivering now are deliverable. I think as we enter into new schems we’ll take a view of where the market goes and not overleverage ourselves.”