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Southern buys flats intended for private sale on major London scheme
Southern Housing Group has snapped up 55 flats originally intended for private sale at a major new London development.
The 28,000-home giant has agreed to pay £17.39m to contractor and developer Durkan for the units at the Britannia Music Site in Ilford.
The deal is the latest example of a developer selling private sale homes to the affordable housing sector amid uncertainty in the housing market.
Crest Nicholson and Bovis are among those that have been doing deals with social landlords. Inside Housing reported in January that some house builders were offering discounts of up to 15% to housing associations for difficult-to-sell homes.
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Southern originally acquired 93 units from Durkan at the Britannia Music Site for £16m in 2017. It is unclear the size of those units and the flats Durkan has just acquired.
Of the total 354 flats for the scheme, 206 are earmarked for private rent, after Durkan struck a £71.4m deal with M&G Real Estate.
The remaining 55 were originally intended for private sale, according to Durkan’s website. Last September, Durkan said that “close to a third” of the properties on the site would be for affordable rent or shared ownership.
Today, it said that “just over 40%” will now be for affordable rent or shared ownership.
The brownfield site, acquired by Durkan 12 years ago, will feature one, two and three-bedroom apartments in a range of blocks including a 24-storey tower.
The entire scheme, part of the regeneration of Ilford town centre, is due for completion next March.
The 55 extra flats Southern is taking on will be completed and handed over this September, Durkan said.
Robert Clark, former chief executive of Durkan, currently sits on Southern’s board of directors.
Last September, Southern was hit with a ‘negative’ outlook by ratings agency Moody’s due to its plan to take on more debt to expand its housebuilding. However, Moody’s retained its A2 issuer rating for the landlord.
