John Lewis threatens to slash affordable flats
Advisers for John Lewis Partnership warned that any planning delays and further demands on funding provided to local services risked making the scheme unviable.
In a letter to Reading councillors, building consultants at DS2, who conducted a review for John Lewis, said the new flat scheme would already cost more to build than it was worth on paper, meaning John Lewis would not be able to 'viably provide any affordable housing'.
John Lewis has committed to making 10pc of the flats at its 170-home rental development in Reading affordable and available at lower rents.
However, they said this was conditional on the council approving the scheme 'within a reasonable timeframe'. John Lewis first submitted the plans for the scheme almost a year ago.
DS2 said any requests for further contributions, such as new demands for extra funding of local services, would also be 'reflected in any reconsideration of the affordable housing final commitment at that time'.
It is the latest sign of trouble for Labour's ambitions to 'turn the tide on the housing crisis', as developers grapple with demands to build cheaper homes at a time of sky-high building costs.
Earlier this month, Angela Rayner, the Housing Secretary, said she wanted to provide the biggest boost to the number of social and affordable homes across the country in a generation.
However, developers say they are facing hold-ups in planning applications, with builders waiting an average of 515 days – nearly a year and a half – for so-called Section 106 agreements to be finalised.
This is where developers and local authorities must negotiate agreements on funding for public infrastructure such as schools, roads or affordable homes. The waiting time for the negotiations has increased by a fifth over the past two years.
John Lewis has already faced local opposition to its Reading home scheme. Earlier this year, The Telegraph revealed NHS officials said they would need more funding to cope with an influx of new patients from the John Lewis flats. They argued local GP surgeries would be overwhelmed by the new housing scheme.
At the time, the council said it was working with John Lewis to 'achieve the right outcome for Reading and its residents, which may include additional funding to help meet identified public health needs in the area'.
John Lewis said it was in talks with Reading Council, and would 'agree the payment which councils normally receive from developments to fund local services and infrastructure'.
Since then, John Lewis has reduced the size of the rental scheme. Last month, the company submitted revised plans for the development, including cutting down the number of homes to 170 from 215.
John Lewis Partnership's director of build-to-rent, Katherine Russell, said at the time: 'It's very important to us that we deliver the best possible scheme and one that benefits the community.'
The Reading scheme is one of three rental home developments being pursued by John Lewis, with the other two having faced setbacks before being given the green light.
John Lewis was forced to launch an appeal with the Government's planning inspector to get approval for its West Ealing, London, scheme after the council failed to make a decision.
Its project in Bromley, meanwhile, faced a backlash from locals and councillors, although the development was ultimately approved last year.
A spokesman for John Lewis said: 'We're committed to providing as much affordable housing for Reading as is viable. We're working constructively with the Council on our plans to transform this brownfield site with high-quality rental homes.'
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