Monday 28 March 2011

Budget bail out for Barratt

George Osborne's budget has provided a boost to property developers who have been struggling to sell because banks have been demanding 25% deposits from homebuyers since the 2008 credit freeze. Under the budgets new FirstBuy scheme first time buyers can pay just 5% deposit and the government, in partnership with developers, lend them the remaining 20%. The FirstBuy scheme is similar to the HomeBuy Direct scheme offered a year ago when Dalston Square Phase 1 was being marketed.

This photo is of Dalston Square Phase 2 - the wraps and scaffolding came off the Dalston Lane end this week

Dalston Square developer, Barratt's Chief Executive Mark Clare, described the Chancellor's budget as "exactly the tonic the housing market needed" . No doubt Barratt's shareholders agreed with him when they saw their share values surge as news of the public subsidy leaked out.

The budget also offers Buy to Let landlords a saving on stamp duty if they buy in bulk - so Barratt's Far East marketing of Dalston Square will get a boost from that too.

A broker, from market analysts Liberum Capital, said it should be helpful. "This is probably not the best way to help the housing market, but it does help to protect jobs among the housebuilders". Yes....and bonuses. Mark Clare earned £5680,000 bonus last year but thousands of Barratt's construction workers were laid off during the credit crunch.

Why the government is offering further public subsidy to property developers and private buyers is a mystery - despite massive public subsidy there is to be no social housing in Dalston Square Phase 2 which is all for private sale.

And we are seeing property developers queuing up to cash in on the budget's "buy now pay later" scheme for disposal of "surplus" publically owned land.

Dalston Square Phase 1 on the left and Phase 2, on the Slab above the station, on the right.

Other concessions to property developers offered in the budget include "streamlining" the planning system. How will this sit with the government's " localism" agenda which it says will give local people more say in the way our environments are developed? We continue to see open and green space, and historic architecture, redeveloped despite local people's campaigns against the loss of bio-diversity and local character. Here's one example and here's another and there are more battles are in the pipeline.


  1. This latest post seems more of an anti-capitalist rant than any credible commentary on development in Dalston. Also your call to; "Save Our Heritage – The fight to protect over 120 years of culture in Dalston" is yet another conservative slogan that doesn't address reality. Why don't you inform us of where London's increasing population are supposed to live? We have a chronic and dire housing shortage with some of the smallest yet most expensive housing anywhere in the world! If you want London to retain its status as a world capital - and I think most Londoners do - we need more affordable housing close to central London. If however, you don't want to see London stay a world capital, that's fine, but at least have the honesty to explicitly say so.

  2. Oliver WilliamsFriday, 01 April, 2011

    And here's another one, even nearer home

  3. "We continue to see open and green space, and historic architecture, redeveloped despite local people's campaigns against the loss of bio-diversity and local character."

    Redeveloped is a bit of a euphemism, isn't it? How about "destroyed" instead?

    Barratts is happy to see open, green space and historic architecture destroyed, if it results in the expansion of Barratt's profits.

    One might ask, tongue firmly in cheek: "Will a Lib-Dem come to the rescue?"

  4. The 2004 London Plan was said to address London's increasing population and housing need. The plan was to create balanced communities by a policy target of 50% social and shared - ownership affordable housing. In Barratt's Phase 2 there is none. We are now seeing key workers and the low paid forced out of London by high rents and Housing Benefit caps. If it is indeed a budget for "growth" it's a growth of opportunities for property developers and buy-to-let investors to grow. It seems less Big Society, more Big Business Society.

  5. Anonymous at 1.05pm has missed the point. The Dalston Junction development doesn't do anything about solving the housing shortage problem. It simply shoehorns in young professionals into high density settlement and does nothing for Hackney's already existing housing shortage for poor families. The question of affordable housing is not addressed by this project and indeed by very few others. There just isn't enough profit in it.

    The answer is to go back to the concept of social housing provided socially. This needs developments (including re-furbs) that are designated for people in need and which are ringfenced as for rent only and cannot be re-sold. It is the only way to guarantee that people can live in decent housing. At present poor people are punished for being poor. They not only eat worse and have greater levels of illness but they live in worse accommodation - and it's getting worse.

  6. Given recent capitalist failures an anti-capitalist rant seems quite in order, not that I think this was OPEN's purpose! Anonymous criticises OPEN for being both anti-capitalist and conservative. Is he/she suggesting no heritage should be preserved in the name of house building? How exactly would the wholesale destruction of London's heritage boost its status as a 'world capital'? As for 'more affordable housing close to central London' anonymous seems to have missed a key plank of OPEN's argument that the housing being provided will not be cheap or affordable! Anonymous' rant, for he is the only one ranting here, highlights the very point being made. Dalston is suffering from a scheme which is destructive of heritage and ugly to boot with no accompanying benefits in terms of affordable housing. If this is the kind of scheme Anonymous wishes to highlight as 'capitalist' and required to keep London a 'world capital' the quicker anti-capitalism prevails the better.

  7. Anonymous at 1.05pm should note: "Under the budget's new FirstBuy scheme first time buyers can pay just 5% deposit and the government, in partnership with developers, lend them the remaining 20%. The FirstBuy scheme is similar to the HomeBuy Direct scheme offered a year ago when Dalston Square Phase 1 was being marketed."

    Here in the States, which we like to think of as the home of capitalism, thank you kindly, we have a term for the sorts of payouts being offered to Barratts and its potential buyers. It is called WELFARE.

    Our tax dollars are collected to pay for helping the needy, the poor and the destitute. That's because we don't want to live in a country where people have to beg on the street for a meal or a bed for the night.

    Hey, Anonymous at 1.05pm. If you call a man "anti-capitalist" because he criticizes the government for handing out tax dollars to subsidize a company that made poor business judgment ... you talking out of a horse's ass and need to go back to school!

  8. Anonymous: we need more affordable housing close to central London

    What, and you think £270,000 1-bedroom apartments of the sort being sold by Barratts at Dalston Square is affordable to most people? Even leaving aside the heritage aspect, establishing expensive new builds in Hackney which are way out of the reach of your average Hackney resident is a form of social engineering which I'm sure would have Pipe's mentors in New Labour nodding with approval.

  9. If any of you were sincere in your claimed desire to see more affordable or social housing, you'd be making the argument for taller buildings, but this OPEN crowd are always doing the opposite. How many of you wrote to Hackney council demanding that the new Peabody Pembury Estate development was as tall as possible in order to deliver as much social housing with decent room-sizes as possible? I'd wager that none of you did. I did, and yes it is "in-my-back-yard". Unfortunately, due to luddite opposition, the council has told them to lower the development from 17 to 12 storeys.
    So come on, where's the OPEN blog proposing quality Modernist architecture which addresses 21st Century housing needs? Surely that would be the way to go rather than yet another conservative naysaying blog that appears to cater to students of the Trumpton School of Town Planning.

  10. Anonymous claims these OPEN fellows are full of: anti-capitalist rant ... luddite opposition... AND ... conservative naysaying.

    One thing you got to credit this Anonymous guy for - when it comes to shooting the political firepower - this guy is sure broadminded!


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