How a deep retrofit project is creating affordable housing again, after 200 years

The affordable housing on South Molton Street is being developed by Grosvenor, the Duke of Westminster’s property company, as part of a £500m regeneration scheme that includes new offices, restaurants and a hotel. Previously, there were eight private sale homes on the wider site, and it was important to Westminster City Council that the developer re-provided those homes in the new scheme and added an additional housing element. (Post-completion, the wider scheme will have a total of 41 homes, including the eight private sale homes that were re-provided nearby.)

South Molton Street is that additional element. The buildings date back to the late 1700s, when they were built as townhouses by the City of London Estate. Their most famous resident was William Blake, the Romantic poet and artist, who lived with his wife at 17 South Molton Street from 1803 to 1821. Supposedly, he wrote his epic poem ‘Milton’ in the living room, part of which Elgar later set to music to make the hymn ‘Jerusalem’. (Going by the line about “dark Satanic mills”, the area was more down-at-heel in Mr Blake’s time than it is now.)

The poet even claimed that he saw the devil walking up his staircase one day, but prospective residents may find it reassuring to know that he saw visions throughout his life; they were not confined to South Molton Street.

In time, the buildings became offices, including the headquarters of the William Blake Fellowship. Grosvenor bought most of the buildings from the City of London in 2015 as long leaseholds and is now turning them back into homes.

There will now be a total of 33 homes on the site, 11 of which will be affordable housing operated by Soho Housing Association on completion. Seven affordable homes will be let at London Affordable Rent to residents on the waiting list. Another four will be let at the higher London Living Rent - this is a tenure for Londoners with a household income up to £67,000 a year, and the homes are advertised on a portal run by the Greater London Authority.

Each townhouse will have a retail space on the ground floor and a separate entrance for the residents.

At the time of Inside Housing’s visit, the hallway is stripped back to its creaking bones and filled with harsh shadows; the only light is a temporary LED strapped to the bannister. An ancient door just about hangs in place, ravaged by woodworm and with a great splinter of wood missing from its surface. A notice has been fixed to it with duct tape: DOOR TO BE RETAINED.

It must be retained because 10 of the 14 townhouses have ‘group heritage’ listed status (due to their historic value as a collection). “When they’re listed, everything is listed,” says Martin Kinsey, senior development manager at Grosvenor – down to the creaky floorboards and sash windows. Several times now, he says, he has had to go back to the council to get another listed building consent after finding unexpected things in the buildings like hidden walls or repair works from previous eras.

As we head up to the first floor, we are greeted with a burst of light. We also begin to see how the Georgians designed their townhouses: the first-floor rooms are the grandest, and they get smaller and smaller as you ascend.

The retrofit project, which is being carried out by Curo Construction, has been running for a year but the homes will not be completed until spring 2026. The buildings “were in worse condition than we thought”, says Mr Kinsey. Some of the townhouses have Victorian extensions that were poorly constructed compared to the Georgian parts; these will have to be demolished.

Mr Kinsey describes the process as “effectively a deep retrofit”, making new buildings inside an old shell. The townhouses will have new plumbing, insulation and electrics, and a new roof. Floor levelling is taking place and new plaster is being applied using traditional techniques. The brickwork will get a layer of insulative lime plaster and original windows will receive secondary glazing. An air source heat pump network is being fixed onto the roof, which requires Grosvenor to apply to become a utility supplier since it will be a landlord selling heat to its tenants. The buildings will be brought up to BREEAM Excellent and from an Energy Performance Certificate (EPC) of F to a minimum of C.

Over the course of the project, Grosvenor has formed some strong opinions about listed buildings policy. It sympathises with the fact that politicians must find a balance between preservation and sustainability, but believes the policy is currently tilted too far towards preservation. That means people don’t retrofit, it argues, which means the buildings will become obsolete. 

It is calling for clearer guidance for local planning authorities that listed building consents can be amended. In addition, it suggests that the Listed Buildings and Conservation Areas Act should also be amended to make explicit provision for this, by definitively confirming that conditions can be used to list – and change – the plans approved in a listed building consent. Westminster City Council and the Ministry of Housing, Communities and Local Government were approached for comment on the proposals.

“We found it challenging to get contractors due to perceived risk. We went through multiple procuring rounds,” Mr Kinsey says.

Like many developers, Grosvenor also takes issue with the current EPC metrics, which it says undervalue the effort it takes to retrofit buildings as old as these. “We can’t do better than [EPC] C on some of these,” he continues. The buildings’ listed status means Grosvenor has to retain the old glazing and window frames, so double glazing is off-limits and airtightness is limited.

One might say the developer feels it is being restrained by the “mind-forged manacles” of conservation policy. And perhaps its criticism has some merit. The build cost for the South Molton Street housing is £25m, rising to a whopping £35m all-in (including procurement, design and planning). Grosvenor, with its £8.2bn portfolio of offices, flats and shops in Mayfair and Belgravia, can afford it. But a similar price tag would deter most smaller developers from embarking on a deep retrofit project. And if the government really wants us to hit net zero by 2050, such projects must become the norm instead of the exception.