Monday 19 November 2012

Taxpayers boost Dalston Square developer's profits

Barratt, the nations biggest housebuilder which is currently completing the towerblocks on The Slab in Dalston Square, has just announced a return to healthy profits after several years of government subsidy by British taxpayers .The subsidies, for first time buyers, have helped maintain house prices, and profits, so Barrattt can now consider paying dividends to its shareholders. Barratt is also expecting to receive about £35m in low-cost development finance next year under the government’s Get Britain Building Scheme.

Local taxpayers have also played a big part in subsidising the Dalston Square scheme despite there being only 10% 'affordable' homes planned. Hackney contributed its £15million neighbouring site for a peppercorn, and  replace our historic buildings with towerblocks as part of the authorities' deal to help subsidise The Slab - a massive concrete raft over TfL's Dalston Junction station on which Barratt's towers are being built. In return Hackney has rented back a three storey shell which has since been fitted out as the CLR James Library and a cafe with Starbucks coffee

The Slab went way over budget from £39million to reach an estimated £63million
and, after allowing for the value Hackney's land and the government and TfL chipping in £10million each, the £24millon overspend had to be picked up by the Greater London Authority.

As predicted, Hackney's gentrification has been boosted by the new Dalston Junction rail link, and the Olympic effect, so that local rents have rocketed. Hackney's rising rents are so attractive to off-shore buy-to let investors that Barratt has opened an office in Beijing.

With only 28 family flats for affordable social rent planned in Dalston Square, out of some 550 new flats, the development has done little to meet social needs locally and Hackney has become unaffordable to many.  As a result Hackney Council, like many London Council's, is now starting to move families out of the borough. With rising rents, and caps on Housing Benefit, things can only get worse.