Decision Maker: Cabinet

Outcome: Recommendations Approved (subject to call-in process)

Is Key Decision?: Yes

Is Callable In?: No

Date of Decision: December 2, 2025

Purpose: Cabinet is recommended to approve the revised delivery proposals for Avenue Road estate regeneration.  

Content: Cabinet:   (1)            approved that the council progress due diligence with the intention of entering into the proposed model with the institutional investment partner to deliver Phase 1 of Avenue Road regeneration;   (2)            delegate authority to enter into Heads of Terms with the institutional investment partner to the Strategic Director, Place and the Strategic Director, Resources.   (3)            approved, as part of the Heads of Terms, entering into of the Cost Underwrite Agreement with the institutional funder;   (4)            approved a demolition notice is served on Avenue Road estate in July 2026 when the previous demolition notice expires;   (5)            noted the proposals for a comprehensive resident engagement exercise to inform residents of revisions to the regeneration proposals;   (6)            noted that the finalised institutional investment and financial models will return to Cabinet in late Summer 2026 for final approval; and   (7)            noted the proposals to deliver Phase 2 of the regeneration.   Options & Alternatives Considered Do minimum / Refurbishment programme If comprehensive regeneration was not taken forward, a refurbishment programme would be required, within the financial parameters of the HRA. This approach would ensure all units are lettable in the short to medium term and that the estate meets all statutory standards but would not deliver modern new homes or improved public realm for existing residents or provide the additional housing essential to the borough in the future. The Outline Business Case demonstrates that either a comprehensive refurbishment programme or works to maintain the estate to minimum statutory standards would be more costly to the council than the proposed approach to deliver the regeneration. A significant level of GLA grant has already been committed to the scheme and drawn down by the council and this would need to be returned in the event that the scheme did not proceed. To not progress the scheme now would stall the site and indefinitely delay delivery, which would have a significant impact on residents living at Avenue Road estate and the number of new homes delivered in the borough in the coming years. Demolition / Mothball scheme The final option for the estate would be for the council to fully decant existing residents and demolish the current blocks. This option would avoid incurring the ongoing maintenance costs to keep the current estate habitable and mothball the scheme until such a time as economic conditions and the council’s financial position allowed a full regeneration to be considered again. This option is not a viable consideration for the council as it would require rehousing all of the current households on Avenue Road estate and would reduce the council’s housing stock at a time when housing supply is in desperate need in the borough. It does not deliver the benefits of regeneration that residents have voted for. Alternative Delivery Models Development Agreement The council has previously employed this model when undertaking the regeneration of an existing housing estate, it involves working in partnership with a developer in a way that limits the council’s exposure to wider market risk and fixes the council’s capital contribution, whilst guaranteeing the delivery of new social homes. In this model there is generally a capital contribution required from the council to make a scheme viable. Where the capital contribution can be shown to be both financially viable for the council and to provide significant social value in terms of new homes and benefits to the wider community, as well as additional housing, then a scheme will be progressed. However, the current proposals for the full Avenue Road scheme are not financially viable for the council to deliver through this model due to the level of capital contribution required from the council. Self-Delivery The potential for the council to self-deliver Block A2 using GLA grant apportioned to the 116 social units has been investigated. However, it has been determined that this would be unaffordable to the council as it would require a significant capital contribution on top of the grant that has been allocated to the scheme. The council does not benefit from the same economies of scale and supply chain relationships as major developers and therefore the build cost would be significantly increased were the council to deliver the scheme itself, there would also be added risk for the council from fluctuations in the wider economic market. The proposed approach mitigates this by transferring a significant part of the development and construction risk to a third party.