Land price rises make current proposals unviable, development corporation says

Soaring land values have forced the Old Oak and Park Royal Development Corporation to alter its plans to build thousands of homes in west London.

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The OPDC said it was revising proposals to deliver nearly 26,000 new homes as part of the Old Oak and Park Royal regeneration schemes following what it called “recent, rapid increases in industrial land values” in the west of the capital.

These meant that it would no longer be financially viable to deliver the early regeneration plans at Old Oak North, an area close to the planned new HS2 interchange station which includes the 54-acre site owned and operated by the automotive retailer Cargiant, and which had been earmarked for development.

Instead it would be working on the large public-sector land holdings near the existing Willesden Junction station and the proposed  HS2/Crossrail interchange hub.

A potential compulsory purchase of the Cargaint site will now not go ahead.

The OPDC said it would not be taking forward the provisional award of £250m of funding from the government’s Housing Infrastructure Fund in its current form for Old Oak North.

It said it would work closely with Network Rail, HS2, public-sector organisations and local borough councils to prepare an alternative strategy to deliver thousands of new homes.  

The OPDC said it had submitted a draft budget that was 20% – £1.9m – lower than the cash limit set by Sadiq Khan, the mayor of London, this year.

David Lunts, the OPDC’s interim chief executive, said the new approach “makes good sense given the dramatic changes in market conditions over the last year or so”. These had seen the price of industrial land soar five-fold in as many years.

“But this in no way undermines our ambition for thousands of new homes and jobs as these can be achieved on many nearby public-sector sites where we are already working closely with our colleagues at Network Rail and HS2,” he added.

The OPDC is one of two major development corporations in the capital. The other is the London Legacy Development Corporation in Stratford, east London.

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