Southwark Council rejects Berkeley Homes' bid to slash affordable housing

Southwark Council's Planning Committee has unanimously rejected revised proposals from Berkeley Homes that would have drastically reduced the amount of affordable housing delivered in Phases 2 and 3 of the Bermondsey Place development on the Old Kent Road. The decision was made on Tuesday evening, October 6.

The developer had submitted new plans seeking to cut the proportion of affordable homes from the originally agreed 40 per cent to just 12 per cent. This would have resulted in only 81 affordable homes being delivered out of a total of 1,060 homes across these two phases. Berkeley Homes argued that the original scheme was no longer financially viable due to rising construction costs and market changes, stating the revised plans were necessary to prevent the site from becoming stalled.

Concerns over rent inflation and gentrification

However, the committee was not persuaded by the developer's arguments. Councillor Alexandra Austin, an Old Kent Road ward councillor, stated that the proposed reduction would significantly diminish local benefits and fail to meet housing needs. She warned that such a cut would actively contribute to increased local rent inflation and gentrification effects within the area.

Eran Cohen, Chair of the Ledbury Tenants and Residents Association, also spoke in objection. He explained that a low percentage of new social rent flats leads to higher overall rents for existing residents. Mr Cohen argued that this scenario unfairly increases living costs for long-term residents who will not be able to afford the new, more expensive properties.

Despite planning officers recommending approval, the committee members voted to refuse the application. Kath Whittam, Chair of the Planning Committee, expressed her dissatisfaction with the 12 per cent figure, noting that elected parties had campaigned on a commitment to 35 per cent affordable housing. She questioned the developer's timeline, suggesting that if it took 16 years to sell enough homes to meet even the reduced target, they might be marketing the wrong type of property.

Background to the Bermondsey Place scheme

The original planning consent for the Bermondsey Place scheme, encompassing all three phases, was granted by Southwark Council in October 2020. Phase 1, located behind Asda's Old Kent Road store, is currently under construction and is expected to deliver 285 homes, with 40 per cent designated as affordable housing. Construction on Phase 1 began in 2021 but was paused in 2022 due to increased costs linked to Brexit, the Covid-19 pandemic, and market forces. Work resumed in autumn 2025 after Berkeley Homes secured funding from the Mayor of London.

Joe Warde-Aldam, Head of Development at Berkeley Homes, stated that the approved scheme was not deliverable under current economic conditions. He indicated that the revised proposals, which also included alterations to building heights and a near 50 per cent reduction in commercial and employment space, were intended to allow development to proceed. Under the revised plans, Phases 2 and 3 were projected to start in 2029, with completion around 2044.

The committee's decision means that planning permission has not been granted for the revised proposals. The original consent remains in place, though Berkeley Homes had previously indicated challenges in its viability.