Council strikes £5m deal to buy Brick by Brick homes


Consulting houses: Croydon has bought 10 terraced houses from Brick by Brick for £5.3million

CROYDON IN CRISIS: Already heavily subsidized housing built by Brick by Brick was bought up by Croydon Council in the days before the local elections. EXCLUSIVE by BARRATT HOLMES, housing correspondent

Serious questions are being raised over the suspiciously generous valuations given to terraced houses built in Old Coulsdon by Brick by Brick, after Croydon’s Housing Revenue Account paid £5.3million to buy 10 properties from the property company council bankrupt housing.

The houses had already all been effectively paid for by Croydon Council, from the £200million loaned to Brick by Brick. And they had been built on land that had been sold to BxB by the Labor-controlled council at a massive discount.

But the properties failed to sell when they were offered on the private housing market last fall.

With the council buying the houses with HRA money, the deal – struck in the weeks before local elections – sees millions of pounds transferred from the earmarked housing budget to the Brick by Brick result, while the company is disappearing.

Brick by Brick played a major role in the bankruptcy of the labor council, as the housing company failed to repay a penny of its multi-million pound loans to the town hall, repay the interest incurred and report no profit on its various development projects in the five years following its establishment in 2015.

The company’s role in the £67million refurbishment of Fairfield Halls is also being investigated for fraud.

The council’s use of HRA money is already under scrutiny due to the alleged diversion of £73million of housing money onto other cash-strapped council spending .

At least one previous attempt by the council to offload some of Brick by Brick’s unsaleable properties has been blocked by government officials and external auditors, suspicious of the ‘circular nature’ of the financial arrangements, with the Labor-controlled council seeking to spend millions to buy a property that he had actually already paid for.

Go cheap: the land on the Tollers Lane estate was one of many discounted deals with BxB

There were also other hidden subsidies.

The site off Goodenough Way on the Tollers Lane estate was sold by the council to Brick by Brick in 2018 for less than £64,000 – well below market value. This, however, was one of the best land sale offers: Brick by Brick was allowed to buy other sites from the council for as little as £1 each.

At the time, the council argued that the ‘value’ of the properties would flow back into the town hall’s coffers from the profits made once the houses were built and sold. This, as expected, never materialized.

The houses in Old Coulsdon are expected to provide much needed social housing, although this was not the intention as the properties were originally offered for private sale to generate profits to be returned to the council.

Land grabbing: In 2016, during its consultation, Brick by Brick abandoned certain construction proposals on local green spaces. But they still went ahead with the demolition of the garage and play area.

Then this spring, as the red and blue tract cults of town hall campaigned ahead of the local election, the sale of the 10 homes built on infill sites on the Tollers Lane estate was slipped.

The properties are not large houses, but all three-bedroom houses, of a type in high demand for social housing. They were acquired at an average price of around £530,000 each.

The Tollers Lane Estate scheme was among the first to be offered by Brick by Brick in 2016. Yet the homes built by the company in Old Coulsdon did not go on sale until October 2021. Brick by Brick has built 18 apartments and four two-bed apartments and 18 three-bed houses on the site of former garages, an electrical substation and children’s play areas, between existing accommodation.

The 10 homes bought with HRA money are those that have remained unsold, despite being offered 40% off through the government’s Help To Buy grant for developers.

Some of the properties, which had been vacant for many months since the developers got their approval, had been vandalized.

According to BxB’s own propaganda last year, “Tollers Lane is a collection of family homes in Old Coulsdon, which will go on sale on October 8, 2021. Designed by Mae Architects, two and three bedroom properties are available, all with our popular interior specification featuring wooden flooring and matt gray kitchens. Shopping assistance is available on all homes.”

The Tollers Lane estate was one of the first BxB projects to gain permission in a flurry of activity when Paul Scott was head of the planning committee in 2017.

The slow delivery, which took more than five years, was part of Brick by Brick’s downfall, and therefore the council’s financial crash.

Slow progress: Labour’s Alison Butler and sleepy former council leader Tony Newman were behind the BxB disaster

Of the Brick by Brick schemes approved with Tollers Lane in June 2017, several others have also been blighted by construction issues and delays, including Auckland Rise and Sylvan Hill, Upper Norwood; Heathfield Gardens, South Croydon; Longheath Gardens Estate, Ashburton; and Station Road, South Norwood.

Some apparently completed buildings remain vacant more than a year after the builders left the site.

In 2017, Croydon Council claimed that “the full value of development growth is retained in the borough – whether in the form of additional affordable housing, physical improvements in local centers or the return of dividends to the board to finance the services of the board”.

Today a Katharine Street source said Inside Croydon“The Labor Administration under Tony Newman and Alison Butler were not allowed to use HRA money to buy brick-by-brick apartments, and auditors have sounded the alarm over the misuse of the HRA funding to bail out other overspending council departments.

“Given that these properties in Old Coulsdon have struggled to sell on the open market, the price paid for them by the council appears very generous.

“It may be the pragmatic thing to do in the effort to stop the brick-by-brick operation, but the council has a fundamental duty to ensure the best value for money for the taxpayer of the council and I expect that the new administration led by Mayor Jason Perry conduct a prompt and transparent investigation into how real estate appraisals were established.”

Read more: Council sells public green space to Brick by Brick for just £1
Read more: Council set to take £100million hit as it comes to an end brick by brick
Read more: “An accountant could have predicted this more than a year ago”
Read more: Conflicts of interest, incomplete contracts, illegal payments

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