Bexley’s housing company counts cost of coronavirus

The coronavirus crisis could cost Bexley Council’s housing company millions in lost revenue, according to a report.

A report going before cabinet members next week (5 May) warns that the current pandemic could lead to a slowdown in the housing market, which could affect the business plans of its company, BexleyCo.

The report notes the only scheme actively being developed by BexleyCo is a site on Old Farm Place in Sidcup, where the company is building 58 homes and apartments.

According to the report, the most recent forecast was that the scheme would generate pre-tax returns of £9.023m for the London borough.

But the report notes the two main risks in the pandemic are a potential 10% drop in private sales and a reduction in construction costs of 5%, although it also adds the real impact will not be known for a number of months.

Assuming private sales do fall by 10%, the council now estimates the total pre-tax returns would be in the region of £6.825m – a reduction of £2.198m.

The report notes that the company is also at the early stage of drawing up plans to develop two other sites – Lesney Park and West Street – but the return on these coulds could be £1.018m lower than anticipated.

The Lesney Park development has a planning consent for 25 new homes, including 8 affordable supported living apartments.

‘This development is relatively small and mostly comprises of family housing and much needed supported living,’ the report states.

‘Construction work is unlikely to start until 2021 and therefore new homes for sale would not be available until 2022. Therefore, this site should be relatively less affected by any temporary slowdown and fall in the housing market.’

The proposed West Street development is around 30 private sales apartments.

‘West Street comprises of flats of relatively low sales values which may still be attractive to buyers should there be a reduction in values in the short-term and in a recovering housing market in 2022,’ the report adds.

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