Merton Council has approved the third phase of the Mitcham Gasworks redevelopment, increasing the project to 626 homes.
However, the scheme will not include a single affordable unit, sparking concern among residents and councillors.
Developers cite financial viability as the reason for excluding affordable homes, while critics describe the decision as “unconscionable” for what is being promoted as the “largest new housing development in Mitcham for a generation.”
Simon Lewis, Planning and Development Director for developers St William, told the council committee on 27 November that earlier plans, including one approved in July promising 35 per cent affordable housing, were no longer feasible.
He explained that the current proposal, which focuses entirely on private rented homes, was guided by “viability assessments.”
In planning terms, viability assesses whether a project can cover costs, including obligations like affordable housing, while still providing a competitive return for developers and landowners.
Lewis highlighted that developers often rely on grant funding to make affordable housing financially viable, as market-rate homes are far more profitable.
In London, grants are available through the Greater London Authority’s Homes for Londoners: Affordable Homes Programme, which aims to help cover funding gaps.
He told the committee: “Our second application, presented earlier this year, was designed to deliver a development consisting entirely of affordable housing. However, it was not possible to secure the necessary funding, as some of the homes would have fallen outside the timescales for which the grant was available.”
The former gasworks site, demolished in 2021, presents additional complexities. Rising construction costs have also increased pressures on the development.
St William said it is still in talks with Merton Council and the GLA to secure funding for at least 146 social rent homes.
Lewis added: “We understand no one wants to see a scheme of this size with no affordable housing. We believe the best way to avoid this is to secure the necessary grant.”
The decision has prompted concern from local residents and councillors.
Councillor Gill Manly, representing Mitcham Cricket Green, said she was “shocked that at this point we are still arguing about viability” and called the situation “a bit of a slap in the face” for residents.
Community groups have also voiced outrage. Tony Burton, secretary of Mitcham Cricket Green Community and Heritage, said: “It is unconscionable that the largest new housing development in Mitcham for a generation should provide no affordable homes.”
Burton expressed scepticism about the viability claims, noting the full assessment has not been published and that Merton Council denied a freedom of information request.
Community groups argue that available figures suggest none of the proposed schemes appear viable, and question assumptions made in the developer’s calculations.
The third application reduces the height of buildings facing Hay Drive and Portland Road, addressing key concerns raised by local objectors.
The project now increases the total homes from 579 to 626, with a higher proportion of smaller private units.
It also expands the public realm by around 460 square metres.
Councillors acknowledged the disappointment, particularly given the need for affordable housing in the area.
Independent Councillor Edward Foley, who works in property, said: “I hope it doesn’t happen again. It is a huge scheme and carries significant commercial risk. However, I believe it will be beneficial for that part of Mitcham.”
The approved scheme is now awaiting finalisation of grant funding agreements before construction can begin.
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