Peabody pulls out of plan to build 564 new homes

A computer-generated image shows a number of flats near a sunny park

A large housing project delivering more than 500 homes in west London will no longer go ahead.

Ealing Council documents indicate Peabody pulled out of plans to build 564 new homes on the Green in Southall after they decided the development was no longer financially viable due to increasing costs and expenses.

The council had agreed a deal with Peabody, which included the provision of 267 new affordable homes.

The council will no longer use powers granted by a Compulsory Purchase Order (CPO) for the Green and will decommission the £16m allocated to the scheme.

Peabody has cited regulation changes caused by the Building Safety Act 2022 which was put into law in 2023.

Specifically, it claims that the most significant reason for its termination was the new requirement to provide two staircases in London for buildings over 18 metres.

'Regretful'

Conservative councillor John Gallant, citing the issues caused by Peabody's withdrawal, asked if the council would now review larger housing projects, and if the authority should opt for a greater number of smaller developments

Shital Manro, cabinet member for new homes said he was "not quite sure" Gallant understood the size of projects.

He said: "This was a project for 535 units, which in its definition isn't a large one. We've got others where there are 2,000 units, so basically, smaller projects probably cost more."

So far, the council had been unable to find a willing partner to develop the land, and with the CPO expiring in May 2026, the council is "open to pursuing alternative options".

In what appears to be a major policy shift away from a housing-focused regeneration of Southall Green, Ealing Council was now considering a more balanced "employment-led and mixed-use development" approach.

The council admitted the outcome was "regretful" but said it would continue to explore options to meet its goal of delivering 4,000 "genuinely affordable" homes.

Manro said there were a number of developments over the past four or five years where, because of issues including interest rates, materials costs and Covid, registered providers had pulled away from the market.