Southwark Gets Tough on Affordable Housing Pledges Again

01 Jan 2018

Commercial and Regulatory, Property, Public Law and Judicial Review

Following litigation brought in the High Court, Chancery Division, the London Borough of Southwark has secured the return of 9 more designated affordable housing units to affordable housing use.

This follows the London Borough of Southwark securing the return of 17 designated units to affordable housing use via mediation in March of this year (see e-flash of 24 April 2017).

The 9 flats form part of the Signal Building development at Newington Causeway, Elephant and Castle. The section 106 agreements governing the development required the flats to be used as affordable housing. However, the defendants alleged that a complex scheme of interconnected transactions had freed the flats from this obligation, enabling the current owners to let them out at market rents.

The fifteen leasehold owners and five banks eventually conceded the claim. They consented to orders declaring that the flats were bound by a planning obligation requiring them to be used as affordable housing. On 13 July 2017 HHJ Hodge QC, sitting as a High Court Judge, approved the declarations.

The leasehold owners also submitted to injunctions prohibiting any use of the flats otherwise than as affordable housing, and agreed to grant options to the London Borough of Southwark to buy the flats for their affordable housing value.

Matt Hutchings QC and Ruchi Parekh represented the London Borough of Southwark.

Matt stated: “Today’s outcome is the result of over a year’s litigation. It fully demonstrates Southwark’s commitment to delivering affordable housing, which is much needed by people in the borough on low and middle incomes.”