London property: What’s happening with Battersea Power Station?

London property: What’s happening with Battersea Power Station?

Tepilo looks at what’s going on at Battersea Power Station, amid reports the number of affordable homes in the new development is to be slashed.

It’s one of London’s most iconic landmarks and has been a key part of the city’s skyline since it was first built in the 1930s – but what’s happening with Battersea Power Station in the here and now?

As anyone who has sped past it on the train in recent times will attest to, Battersea Power Station has been undergoing extensive regeneration work for a number of years as attempts have been made to bring this former industrial powerhouse back into use. For many years, it helped to power much of London, but it stopped generating electricity in 1983 and has since then become known as a London landmark more than anything else.

Located on the south bank of the River Thames, it’s famous for its four chimney layout and its Art Deco interiors. This, and the fact it’s one of the largest brick buildings in the world, has seen it receive Grade II listed protected status, while its celebrity has been helped throughout the years by an appearance in The Beatles film Help! and as the cover art for a Pink Floyd album.

Since being decommissioned in the 80s, though, it has been without a use, with various owners and putting forward redevelopment plans. These have included proposals for a theme park, a football stadium, a giant shopping centre and a chimney-top restaurant, none of which have come to fruition. Meanwhile, the global financial crisis in 2007-8 put paid to attempts by Irish firm Real Estate Opportunities (REO) to convert the site for public use and new homes.

In 2011 the site was put up for sale, but a number of factors – including heavy existing debt and the need to make a contribution to the proposed extension of the London Underground – made it a risky investment. In 2012, however, an international consortium led by Malaysian-based property development and investment businesses, S P Setia Berhad, Sime Darby, and Employees Provident Fund agreed to buy and develop the site, eager to turn it into London’s newest neighbourhood and bring Battersea Power Station back to life.

The redevelopment project, which is being carried out in three phases, began in July 2013. A ‘truly mixed-use destination’, including shops, offices, hotels, restaurants and homes, is the final aim.

Circus West Village, described as the first chapter in ‘Battersea Power Station’s unfolding story’, is set to open this summer, with a number of restaurants, cafes and shops operating in the riverside village.

The first residents have also started to move in, with 100 people – including famous faces Sting and Bear Grylls - now calling a luxury apartment block alongside the building their home. And for the first time in 90 years, the power station’s riverfront – which now includes a piazza and parkland – is accessible to the public.

The power plant itself won’t open its doors to the public until 2020, when the shopping, leisure and residential development will be fully operational. By that time a new Tube station will be in place to help ferry workers, residents, tourists and visitors to and from the City and the West End in less than 15 minutes.

When the redevelopment of the former power station is complete, the 42-acre (17-hectare) site will be home to more than 4,000 swanky new homes, as well as shops, restaurants, cinemas and at least 1.25m sq ft of office space, with Apple already bagging much of this for its workers.

Of the 4,239 new homes on offer, 235 of these are luxury apartments at the top of the power station which have already been sold off-plan, with studio flats starting at £800,000, one-bed flats going from £1 million and four-bedroom family abodes setting buyers back at least £4 million.

While the three penthouses have yet to be priced, these apartments – the swankiest on offer – are set to fetch a price tag of between £25 million-£30 million. Finding buyers at these prices, however, may prove difficult, with London’s super-prime market currently undergoing some troubles as demand falls.

To the south of the power station is where most of the homes will be found, with a number of apartment blocks – designed by Foster + Partners and American architect Frank Gehry – lining a new high street known as the Electric Boulevard. Studios here are easier on the purse strings, starting at £495,000, although this does rise to more than £3 million for a four-bed apartment.

Originally, the development was set to include 636 affordable homes – equivalent to 15% of the total – none of which are actually found in the power station itself. While this number is far less than is usually demanded of major new developments, Wandsworth council agreed to this lower figure due to the substantial regeneration of the Battersea area and the financial help with the Tube extension being provided by the Malaysian consortium.

Now, however, it’s emerged that the number of affordable homes available at the £9 billion redevelopment is set to be considerably lower than initially stated. This has led to stinging criticism from Sadiq Khan, the London mayor. Wandsworth council last month reduced the figure by 40%, down from 636 to 386, lowering the number of homes built in the development that can be counted as affordable to just 9%.

The plan is for the affordable homes to be available to rent at 40% of market rental values, but critics have slammed the number on offer as too low. Others have questioned the social and economic benefits for local residents, with some concerned that the redevelopment will make rents and house prices in the surrounding areas even more unaffordable.

City Hall insists it is powerless to stop the cut in affordable homes. The developers, for their part, said in a statement in June: “Battersea Power Station is determined to deliver 15% affordable homes, equating to 636 homes, and the team is working very hard to make that happen.”

It added: "We understand that asking for flexibility on when the affordable homes are delivered across this 15-year project is not straightforward, but our priority is to make good on the trust people have placed in us by starting on the first 386 affordable homes this year.”

The original number of affordable homes may still be delivered, but there are some who would quite rightly argue that even that number was way too low given the lack of affordable homes across the capital.

At a time when affordable homes are needed more than ever, and buyers need a leg-up to get on the property ladder, surely a huge redevelopment project such as this would have been a perfect opportunity to create a neighbourhood of genuinely affordable properties?

While the argument that luxury homes are needed to pay for the power station’s restoration has plenty of credence, the concerns over affordability – and Battersea Power Station being yet another luxury apartment block for the very rich – won’t disappear anytime soon.