It has been revealed that Battersea Power Station is looking at their delivery priorities in order to ease their financial burden. The project has apparently got to a critical point where it is thought necessary to reduce their projected investment returns from 20% to 8.29%. There is also plans to move the more affordable home projects to a later phase in the development. The regeneration of the iconic London former power station should provide 3,992 apartments on the 42-acre site. A new mechanism will also be used in order to work out the amount of affordable housing the development can actually offer when completed.
Due to this quite downcast announcement, the LCP has analysed the recently released Land Registry Data, looking particularly at the sales of new builds. This analysis has shown that in 2016 Prime Central London and Inner London have dipped. In Prime Central London locations, the average price of new built flats has decreased by 8.7%. For luxury properties, there has been an even more drastic decrease of 57%. It has also been recorded that in this area of London, 44% of 2016 property sales occurred in the first quarter because of buyers rushing to beat the deadline for the additional rate of Stamp Duty. As for Inner London, which is the nine boroughs that sit outside of the Prime Central London area, there has been a drop of 3.9% at the end of 2016 in comparison to the year before. There was a 34.6% fall in the final quarter of new build sales that are valued at under £1 million, which is 88% of all of the new builds in the Inner London area.
With the development at Battersea Power Station already reporting some financial viability problems when it comes to delivering their affordable housing targets for the development, there could be a number of problems on the horizon for the project.