Target of 50% affordable homes sparks trend for councils to redesignate sites planned for employment

A string of small developers and housing associations is buying land designated for employment use and persuading local authorities to let them build affordable housing instead.

The trend, which has rapidly developed across London and the South-east in the past 12 months, has never been seen on this scale before and was sparked by last year’s London Plan.

This set a target for half of all new housing in London to be affordable and, in order to hit this, encouraged councils to consider permitting housebuilding on “unneeded industrial or employment land”.

A London property agent source said: “What they are doing is quite straightforward really. They are buying the land at a certain price, getting the land use changed to residential and then selling it on at a nice profit.

“Some boroughs in London are reluctant to make the change but others are very keen as it is much-needed affordable housing that is getting built.

“People are unlocking redundant and inefficiently used land. It is a good thing – everyone wins. Housebuilders get land and councils get the affordable housing they need,” he added.

The sites involved so far have tended to be occupied by rundown factories that once employed hundreds of people but are now no longer competitive. They have ranged from a small infill plot to six-and-a-half acres.

People are unlocking redundant land. It is a good thing – everyone wins

Source at London property agent

The source added that deals had been done in Hammersmith and Fulham, Brent and Croydon and were likely to be taking place in “at least half of London’s outer boroughs”.

One of the better known companies, which has five such sites in London, Bracknell and Woking advertised on its website, is Cadenza, run by Tony Pidgley Junior. Two others linked to similar purchases are Lemon Land and Brookes Place. None of the three firms were available for comment.

London and Quadrant Housing Group – one of the UK’s largest housing associations – has just bought a disused 1 ha site in Hackney, east London, which was designated for employment use.

Simon Baxter, L&Q’s principal development manager, said: “We plan to build 310 homes on the site and create up to 60 jobs as part of a £65m mixed-use development. This is by far the largest site on which we have tried to do this.”

He added that L&Q was also developing a similar £40m scheme in Stratford, which would ultimately provide 150 jobs and 160 homes.

“We will definitely be looking to do much more of this in future. In London alone there are potentially huge areas of land that could be re-zoned for housing as there is little demand for them as sites for employment use,” Baxter said.

Employment sites sold for housing

Stratford Eye, Newham, London – London & Quadrant Housing Group
Site of the former Maryland clothing factory. The council wanted it to be redeveloped solely for employment but L&Q proposed a £40m mixed-use scheme that would create up to 150 jobs in a 4000 m2 office block and 160 homes in a 19-storey tower. It is expected to get planning permission in September.

Royal Mail depot, Tower Hamlets, London – Cadenza Group
Typical of the sites Cadenza has bought since it was founded by Tony Pidgley Junior in 2001. It received planning permission in May this year for 72 flats.