The GLA's 'balanced' approach
The Mayor's approval of BL's s73 application, including the reduction in affordable housing, relies on the recommendation of the GLA Stage 3 Report, after it weighs up the pros and cons of the proposed changes - the so-called 'planning balance'.
The report surprisingly begins its conclusion by saying that 'The changes are not considered to result in a development that would be substantially different in nature or scale to the original permission', despite the big cuts to affordable housing, and the large increases in floorspace, height and density [^10].
The report then notes that the Mayor must judge the application against the development plan and 'material considerations'. This places housing alongside all other aspects of the development in the planning balance*,* without any priority and without giving housing any exceptional weight [^11].
Housing is also taken as a single category, without distinctions of type. Two-bed, three-bed or family housing are not mentioned at all in the conclusion and planning balance section. Nor is student housing, or the introducion of co-living; it is all rolled into 'housing', regardless of who the the housing is for. The report instead commends BL's application, saying 'it will optimise the potential of the site to bring forward much-needed quality housing on a stalled site.........which should be given substantial weight'; who these homes will house is given no consideration [^12].
Having first acknowledged that the cut to affordable housing '...reduces materially the extent of public benefit', the GLA next addresses affordable housing in the context of viability. The GLA note BL's original offer of 35% affordable housing, but then accept their assessment that 3% affordable housing is now the maximum viable amount. The GLA then advises the Mayor that their 'considerable scrutiny' of BL's assessment , should itself be given 'considerable weight'. They do not advise him about how much weight to give any loss or harm caused by the affordable housing reduction [^13].
The report then notes that a grant has been awarded to BL, which would increase the affordable housing to around 9% across the whole scheme. This is also considered a material consideration that 'weighs in favour of the application', while also noting that the lower level from 35% reduces its public benefit [^14].
The GLA report follows through on this line of reasoning, to describe the housing provided 'including affordable housing' as a 'significant public benefit', repeating that it 'weighs in favour of the application', without considering whether the reduction in affordable housing, from 35% to 3% (or 9%), should not also be taken into account, as weight against the application [^15]. So it appears that, while the GLA doesn't deny that 9% is less than 35%, they nonethess think that 'in the balance' getting 9% outweighs losing 24%.
It may be that the GLA adopt this line because they are convinced by the viability assessment that only 9% is possible. This, though, even if true, has no bearing on how much harm the loss of affordable housing will cause. It appears that as far as the GLA is concerned, if it cannot be built, not having it can do no harm.
The viability trump card
The changes made by BL in the Canada Water development scheme, including the increase in height and density, adding non-conventional housing, and reducing the affordable housing provision, are being made to support the viability of the scheme [^17].
But assessments for viability are based on many arguable assumptions, at best, and in the case of big schemes like Canada Water, are just snapshots of developments that will take years to complete. Canada Water is due for completion by 2033, but Phase 1, a fraction of the whole and due by 2023, is only just completing [^18], making the 2033 finish date optimistic.
And while BL say now that only 3% affordable housing is viable, in 2020 it promised 35%, even though supposedly only 11% was viable [^19]. After a hefty grant of £43.75m from the Mayor BL have committed to around 9%, across the whole scheme, to be delivered as 150 social rented homes in the next 1,000 new homes, which equates to 20% of that tranche of housing [^20] [REF- GLA Stage 3, 2ii]. BL contend reasons......
It must be remembered as well that an 'unviable' scheme is not an necessarily an unprofitable scheme. The developer themselves set the level of profit that turns an unviable scheme into a viable one. The GLA say that they unable to say, in cash terms how much this might be [REF]. In percentage terms it will be 15% IRR, (Internal Rate of Return), a conveniently obscure measure of profit, favoured by developers. The draft financial viability assessment attached to the approved permission gives the scheme £445.37m at 7.56% IRR, which by the roughest of estimates indicates that the treshold for viability, and for any more affordable housing will be nearly £1bn.
There is also the is is a change from measuring profit by GDV to by IRR.the previously agreed 16% GDV (GDV) the lay person.
Finally, the common sense argument well made by local councillors and objectors at the Mayor's hearing, that if a scheme cannot suppply the affordable housing needed (when most people in Southwark need affordable houisng), does not meet the needs of the local community in other respects (cinema etc) and can only be built with any affordable housing if most of the cost is met from the public purse, then maybe it should not be built at all? In short, if everything the local community needs has to be dropped to make a scheme viable, then vibility becomes the whole point; we are building something because it is viable not because it is what is needed.
Will we get more affordable housing from viability reviews?
Viability reviews sound like a reasonable compromise when there is doubt and argument about how viable a scheme is and how much affordable housing can be provided.
However, they have no track record of reviews delivering any great amount of additional affordable housing the liklelihood of enough surplus profit being identified to fund to do this is unlikely when the starting point has been set so low. The accepted viability of the scheme is 3%, which means that it would have to improve five-fold, to reach 15%, before a single additional affordable home is secured.
In both cases, it is worth noting any review will only be off the residential element, less than half by floorspace, os any profit created by the non-residential element will be left outof the picture.
mongst the questionable assumptions is the level of profit required before the whole scheme becomes 'viable'. At 3% affordable housing BL will be making £xxxm (propped up by the GLA grant).
email 25 March 2026 -
Hello Jerry
The answer is yes to the first two questions. I’m afraid that I’m unable to answer the third.
- If the review is indeed of the residential units only, I assume that the profit hurdle, before any additional affordable housing can be secured, would be 15% IRR on just the residential element?
- If this is so, what would the profit hurdle be in cash terms, according to the S73 Illustrative Scheme Base appraisal, appended to the S106 agreement?
[SCREENSHOT -DRAFT S106 SHOWING GRANT]
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GLA's balancing act does not include is any consideration of how the application's reduction in affordable housing will impact on the homelessness in the borough [REF; homelessness strategy], or how it will hamper the Council's ability to relieve its own housing waiting list [REF; now standing ar 23,000 households]. Indeed the words 'homlessness' does not appear anywhere in the report and 'family housing' appears only once, as part of an objection to the application.
It is a strickly bureaucratic exercise. The lose of affordable and family housing is acknowledged by the GLA [PARA 393] as reducing the 'extent of public benefit deliered by the proposals' but this evidently but does not carry enough weight in the planning balance, to warrent rejection of the scheme;
The fact that most of the other benefits that were being being delivered are still being delivered and that the significant detrimental change is the loss of affordable housing is not the GLA's perspective. it's view the schemes
Instead the GLA adopts a 'glass-half full' approach - if there is any affordable housing at all that has to be welcomed and any reduction from what was previously agreed is justified by changes in economic circumstances, that in turn damage the viability of the sCheme and just have to be accepted.
But it is up to the Mayor how much weight to give viability assessments, when reaching his decision on any application. The GLA report presented to the Mayor dutifully notes this [REF para 208] [^9iii], only to then go on to say that they, and Southwark Council,agree with BL about the viability of the scheme*,* and 'they have given it considerable scrutiny and that it is this scrutiny that should be considerable weight by the decision-maker' rather than any loss of affordable housing [REF para 209].
This positive approach is given strength, according to the GLA, by a Government Policy Note 'Support for housebuilding in London' and the Mayor's 'Support for Housebuilding' LPG (London Plan Guidance), published the very previous day. Both these documents outline a co-ordinated reduction in the affordable housing requirement, from 35% to 20%, under the so-called fast-track route for planning permission*, designed to* 'unstall'* stalled schemes, just like BL's Canada Water scheme (even though it does not qualify for the new fast-track route, because it does not provide 20% affordable housing, as the GLA admit) [REF para 192].
(*while leaving the door open to any other developer who wants to deliver less to continue to do so, by producing viability assessments).
While noting this newly-minted policy support for their position the GLA ignores another pending policy direction, following from the Support for Housebuilding package, which says 'Where developers submit a Section 73 application that seeks to reduce affordable housing provision based on a new viability assessment, the decision-maker should have regard to the harm that such a reduction may cause and give this appropriate weight in the overall planning balance, alongside the wider merits of the scheme'. [REF Proposed reforms to the National Planning Policy Framework and other changes to the planning system December 2025 PG 29]. This remains under consultation, and was not published the day before the hearing, so was safely ignored.
How the reduction has been dressed up
Percntages are always a fraction of something. The GLA are straightforward in saying that the percentage of affordable housing is only around 9%, but also ^x Stage 3 2ii when calculated against the maximum number of units allowed under the amendned planning decsisionthe Mayor has dressed his decision up as a more respectable 20%
11% becomes 35% becomes 3% becomes 10% (maybe) becomes 20% becomes 17% becomes 9%
Grant has been awarded to the scheme, allowing 17% (by habitable room) affordable housing in the next tranche of 1,000 homes to be provided as 150 social rent homes, equivalent to 20% at a tenure compliant level (c.9% across the whole scheme).
A bigger scheme, with maximum flexibility
BL justify these drastic changes by referring to the cost of installing second staircases, thus losing saleable floorspace, and wider adverse economic conditions ^x.
Not over yet - Reserved Matters Applications
What BL wanted all along - BNPP Review of Affordable Housing and Viability Statement Dec 2018
Strong opposition - Cllrs Whittam, Cryan and Roberts, local resident, Michael Robertson, 35% Campaign.
What's been delivered so far - Phase 1
Less affordable housing for us, more profit for BL
Despite the adverse/challanging economic conditions that make BL think that this is a good time to reduce affordable housing, BL not only wants to maintain it's profit but, rather like Oliver Twist, is asking for 'more' (and without any 'please!'). Buried in the the many viability documents supporting their application, BL assert a claim for a profit threshold equal to 17.5% IRR**^x**. This would be be the amount needed to make the scheme viable and the profit hurdle that will have to be cleared before BL are liable to provide any more affordable housing, in the event of viability reviews. BL do not say how much 17.5% IRR would be in cash, but in its assessment for a scheme with 3% affordable housing (which is what it is asking the Mayor to approve) it equates a 10.54% IRR of 10.54% with £991.61m. Southwark's appraiser, BNPParibas gives a figure of £1.052bn for 11.05% IRR and £1.06bn for 11.13%. by a very rough calculation this would make a 17.5% IRR equate to £1.4bn-£1.6bn.
This is in hefty contrast to the 16% GDV that BL were happy with when they got there original planning permission which equates to £700m....., which to most already sounds like a pretty generous profit ^x.
They are all at it....
Berkeley Homes, Aylesham and Bermondsey Place, Phase 2&3
Important views, height, affordable housing and planning balance
Loss of family houisng does not even get a mention in the consideration of planning balance.
which barely acknowledges that there has been a huge reduction in affordable housing and an accompanying loss of family housing.
The first GLA report on BL's application devote a lot of space to discussing how the new development interferes with 'important' views, and how this can be avoided and mitigated, which would be a secondary consideration to many minds. However, it is significant in assessing the so-called planning balance, where harms have to be weighed against benefits, in deciding whether to approve an application. The consented scheme had the advantage of a relatively high, albeit minimum amount of policy compliant affordable housing, which was judged by Southwark and GLA to outweigh the harm to views. The scheme BL now propose, while it has some design changes, is much bigger, with a much bigger impact on views, and with neglible affordable housing, has lost that advantage, in the decision-making balance.
Public land
It would be easy to forget that the docklands were public land. Taken over by the London Docklands Developlment Corporation. Divested to Southwark and other borough councils in ??. Southwark Council owns the free-hold
Viability
What BL always wanted - BNPP Nov 2019.
What we say - taken out of Southwark's hands....
GLA bent itself not just backwards, but in every direction to accommodate BL. List concessions.... Only resisted on profit hurdle - 15% IRR, not 17.5% IRR asked for, although have conceded IRR not GDV as measure.
As well as being allowed to reduce affordable housing, restrict family housing and add unconventional housing,
The Mayor is not reminded, or advised, to give any weight of any kind to what the consequences of reducing the affordable housing from 35% to 3% would be.
This is an outrageous attempt by a big property developer to avoid their planning obligations. BL have taken advantage of the present poor economic conditions to warp the Canada Water development so badly, that it would serve only their need to make as much money as possible. Not only will they be relieved of providing anything beyond the bare minimum of afforable housing, they will be given a free-hand as to what what other types of housing it will provide - preponderantly one-bed, more studios, more student, introduce co-living, less family housing.
A very late publication of two technical documents indicates that BL may be slightly improving and frontloading their offer, to make it appear more attractive by proposing 20% affordable housing for the next tranch of 1,000 homes. There is no explanatory text, but viability reviews may also be promised, with the hope of further improvements. But, if it happens, this 'jam tomorrow' approach does not make BL's proposals any more palateable. Any viability review would have to clear the mighty £1.04bn- £1.06bn profit hurdle, before we would see more affordable housing and without an across-the-board improvement, covering the whole scheme, the total amount of affordable housing will increase to only about 7%. Nor should the local community have to fight every month or year over the many years that it will take to complete this scheme for what should be guaranteed at its start.
t by It is unlikely that BL's application would have been approved by Southwark Council, given the huge reduction in affordable housing, regardless of whatever the viability assessment said. Even though their record is not unblemised, Southwark has stuck to 35% affordable housing as the minimum affordable housing it will accept when determining major applications, for example on the Old Kent Rd. At the same time there may be some relief that it has had the decision taken out of its hands. We understand that Southwark will oppose the application at the Mayor's hearing, but it should be doing much more to rouse public opinion, even if it means clashing with the Mayor.
In any event BL obviously believe that they stand a better chance of getting approval if tne Mayor take the decision. They would alos have been encouraged in their course by the Mayor joining with
Zonal density cap will be removed.
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Footnotes
Unless stated otherwise all references are to GLA Stage 3 report (GLA/2025/1006/S3, Southwark ref 25/AP/0242, 27 March 2026). Most of the planning documents can be found via Southwark's Planning Register, using the planning reference numbers.
[^11] The development plan comprises the Southwark Plan 2022 and the London Plan 202 (GLA Stage 3 report, para 47). A material consideration is described on the government's planning webpages as 'one which is relevant to making the planning decision in question'; more helpfully, it continues, that material considerations are 'concerned with land use in the public interest, so that the protection of purely private interests such as the impact of a development on the value of a neighbouring property or loss of private rights to light could not be material considerations'. Other aspects taken into account in the planning balance, besides housing, include design and appearance; heritage and environmental impact; work, leisure and other uses; jobs, transport, education and viability.
[^13] Para 211, 392
[^14] Para 393. The Mayor has made two grant awards for affordable housing, one of £7.55m, and a second of £43.75m. Southwark Council has also made a £35m contribution towards the leisure centre. Total contributions amount to £86.3m. See Canada Water Draft S106 DoV - Annex 3 Baseline Viability Appraisal. The BL representative at the application hearing gave an approximate construction cost of £500,000 per housing unit, which would mean that about two-thirds of the construction costs of the remaining 154 affordable homes are met from the public purse. The construction cost for the Leisure Centre, plus 'Grown Fees' is £9,700,000 (Housing Statement Addendum and Financial Viability Assessment January 2025 QUOD, pg 54, Financial Management Report 22.
[^15] Para 397
[^16] Para 390
[^17] Housing Statement Addendum and Financial Viability Assessment January 2025 QUOD, para 1.6, 1.7.
[^18] After the development was approved by planning committee in Sept 2019, the s106 agreement, sealing planning permission, was signed in May 2020; implementation of the development was in Oct 2020. See Housing Statement Addendum and Financial Viability Assessment, Jan 2025 QUOD, 3.2, 3.5. See Planning Statement Addendum, January 2025, DP9, 7.1.2, for completion date of 2033 and Planning committee report, para 196,18/AP/1604, 25 & 30 Sept 2019 for anticipated completion of detailed plots of Phase 1.
[^19] Para 2ii
[^20] In fact the amount of affordable housing is only 17% of the next tranche of 1,000 homes, when calculated by habitable room, but the GLA counts it as 20% because it is all delivered as social rented, rather than in the policy compliant mix of 70:30 social rent;intermediate housing. The GLA arrives at the 17%-20% equivalence by comparing the development value of a policy compliant affordable housing offer with that where all the afforable houisng is social rent. The
[^9iii] GLA Stage 3 report, para 208. Paragraph 59 of the NPPF states: “The weight to be given to a viability assessment is a matter for the decision maker, having regard to all the circumstances in the case, including whether the plan and the viability evidence underpinning it is up to date, and any change in site circumstances since the plan was brought into force. All viability assessments, including any undertaken at the plan-making stage, should reflect the recommended approach in the National Planning Practice Guidance, including standardised inputs, and should be made publicly available.”
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^x REF Housing Statement Addendum Sept 2025. All planning documents for the application can be found via Southwark Council's Planning Register, by entering the planning reference number 24/AP/0242. The reference for the original planning permission documents is 18/AP/1640
^x GLA Stage 1 report, 24/AP/0242, 15 Sept 2025, paras 10, 32
^x Planning Statement Addendum Sept 2025, 1.6, 1.7.
^x Calculated from GLA Stage 1 report , 24/AP/0242, 15 Sept 2025, paras 8, 11. Total development floorspace cap increased from 656,200sq.m. to 766,148sq.m. Residential floorspace cap increased from 331,500sq.m. to 472,600sq.m. Introduction of Co-Living (Sui Generis) accommodation. Increase in the hotel land use cap from 7,500sq.m. to 16,500sq.m. Increase in the extent of basement footprint for Zone D and Zone H.
^x Planning Statement Addendum, Jan 2025, 2.1.8
^x IRR is the 'Internal Rate of Return', an alternative to using a percentage of the Gross Development Value (GDV) to measure profit, which takes account of cash flow. REF - 4.1 ETC
^x 16% GDV REF
https://data.london.gov.uk/dataset/canada-water-masterplan-hearing-documents-2z18q/