The council’s controversial developer Brick by Brick will not reveal why it is sitting on over £7 million worth of potential sales from affordable housing built in Thornton Heath using council funds?
The Chronicle has been asking ING Media, a leading PR agency which represents Brick by Brick, for an explanation since July about the 23 empty one and two bedroom ‘affordable homes’ in the Flora Court development on Chipstead Road.
The Brick by Brick web site says sales for these shared ownership homes worth more than £315,000 each which boast ‘private balconies with striking interiors’ are “currently on hold” but the money could provide a much need boost to Croydon’s bankrupt coffers.
Croydon’s chief financial officer Lisa Taylor citied one of the reasons which had prompted the issuing of the Section 114 notice, the equivalent of going bust, was because of the “greater risk than previously anticipated” around Brick by Brick, “being able to make interest and dividend payments due to the council this year and for previous years” which add up to £36million.
Brick by Brick was loaned £250 million by the council but to pay this the council had to borrow money itself. Now the council has been forced to ban almost all new spending and is making hundreds of staff redundant.
When The Chronicle asked ING Media why Brick by Brick’s development Flora Court had sat empty since the beginning of the year they were unable to provide any real answers.
ING Media’s relationship with the council pre dates Brick by Brick. According to an FOI in 2015 CEO of Brick by Brick Colm Lacy first recruited ING Media as far back as 2013 when he was the council’s Director of Development and they were paid thousands on a 12 month rolling contract during that period to enhance Croydon’s brand.
Even though the council has its own communications department some form of arrangement with ING Media still continues.
In July, The Chronicle reported that the former derelict Cheriton House care home site which Brick by Brick paid the council just £18,000 for was virtually empty. Just before Christmas 2019, three residents on the council housing waiting list were the first to move in to brand new one-bedroom flats, but apart from one affordable home the other 23 homes are unoccupied in the flagship complex.
Earlier in the year the developer was forced to suspend all sales of its homes after it emerged lenders would not provide mortgages under shared ownership schemes on its properties because the company was not a ‘registered provider’. Anyone buying a 25 per cent share in one of these flats has to pay £78,750 and put down a five per cent deposit of £3,688.
We were told this had been resolved but in October when The Chronicle again asked still ‘no’ more had been sold and no date was provided for marketing the remaining 23.
An ING Media spokeswoman explained: “There are a number of lending options available to prospective buyers, notably through Censeo – a broker specialising in shared ownership mortgages.”
We pursued again. Why had only one affordable home been sold? On October 26, The Chronicle was told: “Apologies for the delay in coming back to you. I’m liaising with Brick By Brick and hope to send a more details response to you soon.”
On November 4 in response to a further inquiry: “I’ll be able to give you a full update on this next week.”
The Chronicle is still awaiting a response 14 days later.
Following the council’s issuing of a Section 114, CEO of Brick by Brick Colm Lacey, featured in the trade press canvasing potential buyers for the council owned company, knowing the council has no choice but to continue to support the house builder as it can’t afford to lose its investment.
Ironically on September 28 just weeks before the council’s financial mess was exposed The Chronicle received an email from ING Media hailing ‘a really great year for’ Brick by Brick “…proving our innovative model works at a challenging time for public sector finances.”
It said it had completed 283 homes since 2016 of which 131 are affordable, boasting: “We expect to post a profit for financial year 19/20, defying the wider residential slowdown brought about by Brexit stasis and the Covid-19 crisis.”
It reported generating £23m in revenues in the financial year 19/20, and said it expected to announce a pre-tax profit of c£250k in audited accounts.
It also revealed that throughout the summer residents: “have been moving into their new Brick By Brick homes” and quoted Sam who moved from Herne Hill in neighbouring Lambeth to the Auckland Rise scheme in Upper Norwood, Croydon.
He is quoted as saying: “Unlike other developers, Brick By Brick have put people before profit by making sure they have nice homes for years to come.”
*Pictured top right: CEO Colm Lacey at the Develop Croydon conference in December 2016.
* Flora Court is in the Bensham Manor ward and our picture shows former cabinet member for housing Cllr Alison Butler and Cllr Humayun Kabir back in January 2019 at the topping out ceremony.