Volatile economy blamed for council ditching planned developments

A WEST London council is “unlikely” to build some of its planned developments as the economy is too volatile.

Plans for some new social and affordable housing in Kensington and Chelsea – London’s priciest borough – might be axed due to cost pressures from Brexit, Covid-19, rising energy bills and the war in Ukraine.

The council plans to build around 600 new homes across the borough with at least half of them marked for social rent.

The local authority also plans to spend £460 million on revamping its existing homes over the next nine years and has already started this work.

But some plans may be delayed or scrapped due to inflation and increasing cost pressures, according to reports by the council’s director of housing and social investment, Dan Hawthorn.

In the report, Mr Hawthorn said: “The current economic outlook for the country is currently extremely volatile for a number of reasons including the short, medium and long-term implications of Brexit, the effects from the war in Ukraine as well as the energy price pressures.”

It adds: “It is now becoming clear that the council’s capital programmes, as currently scoped and budgeted, are unlikely to be deliverable in the medium to long term. Given the scale of the challenge, we will at least have to consider more challenging options, for example in reprofiling/ delaying some works, changing the scope of works, or pausing/ cancelling projects altogether.”

Data from the Office for National Statistics shows properties in Kensington and Chelsea typically cost 36.5 times average earnings.

The council is looking into the full impact of current and expected future economic challenges to get a better understanding of how this might affect its plans to build new homes.