Haringey Council scraps Lendlease JV to set up own company to build affordable homes

Following months of uncertainty, rumour, public protests and the election of new councillors in May, Haringey Council last night formally scrapped its controversial £4bn housing joint venture with Lendlease that would have delivered 6,000 homes in the north London borough. 

The council announced that its cabinet has “decided not to proceed” with the Haringey Development Vehicle (HDV) to which Lendlease was appointed preferred bidder back in 2016. The council also said that it had made a decision to establish a wholly owned company to provide more affordable homes.

The HDV would have seen Lendlease build 6,000 homes in Haringey, with land owned by the local authority being transferred into the venture. The land transfer of the HDV proved very controversial and many local Labour candidates in May’s council elections campaigned on a pledge to scrap the scheme.

A report by the council’s officers recommended the authority’s cabinet terminate the HDV and said that Haringey’s new political leadership did not agree with a series of assets wholly-owned by the council being transferred into the partnership and it also raised major concerns with the level of risk the project faced.

The HDV scheme provoked wide-scale opposition in the local community.

The scheme was also criticised by Labour leader Jeremy Corbyn who argued for communities to have much more of a real say in developments in their local areas.  Many Labour candidates last May were emboldened by the approach of the party’s leader and opposition to the HDV became a driving force of the campaign, so much so that local people elected a new political leadership in Haringey as a result.

Responding to the council’s announcement to establish a wholly owned company to provide more affordable homes, Richard Brown, research director at Centre for London said: “Councils across London are showing commitment to building more homes for Londoners, directly or through joint ventures.

“Haringey will now join the 17 other boroughs who have active wholly-owned development companies. Together these schemes have 12,700 homes in the pipeline for the next five years. Boroughs are ready to play a bigger role in delivering housing and making the most of their existing assets. Indeed, if every one of London's 32 boroughs committed to delivering a minimum of 10% of their draft new London Plan target (either directly or through a wholly-owned company), a total of 37,300 homes could be delivered across the next five years, representing 12% of London's housing target overall.”

Haringey Council’s decision seems likely to see Lendlease take legal action. In a letter sent last week to the new council leader Joseph Ejiofor by Lendlease Europe’s chief executive Dan Labbad, he warned that the company would seek redress for the “very significant investment over the last two and a half years” should the council reverse the decision of its predecessor.

In a separate development, London mayor Sadiq Khan has announceed that redevelopment schemes in London that would result in the demolition of social housing will only get city hall funding if residents approve the scheme in a ballot. The measure announced today by the mayor will not apply retrospectively however, so it will have no impact on other contentious plans by London councils to demolish existing estates.

Mayor Khan said: “When estate regeneration is done well, it can improve the lives of existing residents as well as building more social housing. But that has not always been the case. Anyone drawing up plans for estate regeneration must involve local people and must consider what impact their plans will have on people who live there now.”