Bellway’s chief executive has admitted that “months of negotiations” will be needed to finalise funding of a new rail link announced in the Budget, with 2,500 new homes at Barking Riverside hinging on a successful deal.
Chancellor George Osborne announced in the Budget that the government was going to “build more homes in Barking Riverside”, a scheme that currently only has around 360 homes completed with a further 350 under construction.
The Barking Riverside scheme has planning permission for 10,800 homes, of which around 40 per cent would be affordable, but large-scale production is contingent on new transport infrastructure being built as part of the section 106 agreement.
This includes an extension of the London Overground line from Gospel Oak, which currently runs as far as Barking, and will cost around £176m.
There also needs to be provision for a new free school and a site is being prepared by Bellway with the Barking and Dagenham Borough Council in readiness for construction to begin.
Once the rail link is completed, a trigger is reached in the contract which would see Bellway Riverside Ltd, a joint venture between Bellway Homes and the Homes and Communities Agency, build a further 2,500 units on top of the first phase of 1,500 new homes.
At that point, with around 4,000 homes built, more transport infrastructure would be required to ensure further development.
Construction News understands the Treasury will expect significant contributions from both the private sector and Barking and Dagenham Borough Council towards the cost of the scheme.
It is understood that representations were made to the prime minister’s office for support for the scheme, for which planning permission was agreed in 2007, ahead of last week’s Budget.
Bellway chief executive Ted Ayres told Construction News: “This rail extension would fulfil the planning obligation and accelerate the production of new homes at Barking Riverside in the near future, so it’s good news.
“Just because it’s been announced doesn’t mean there will be a cheque handed out to us tomorrow. I expect there will be protracted negotiations over the coming months.
“There is a long way to go but I think it signalled intent from the Treasury that they will support the housing.”
Asked whether Bellway was willing to put funding into the transport infrastructure, he said it was “all to be discussed”.
Barking and Dagenham Borough Council deputy leader Rocky Gill said: “If we are serious about dealing with the housing crisis in London we need first-class rail links.
“It’s frustrating when you look at the money spent on ‘Boris bikes’ or the Thames cable car, you’d think £180m would be a drop in the ocean in terms of the benefits it provides.”