Southwark Council Approves 380 New Homes for Key Workers
Southwark Council's Executive has approved plans to develop approximately 380 new homes for key workers on two sites in Rotherhithe and Cherry Gardens. The decision, made at a meeting on Tuesday 13 October 2026, aims to address the growing affordability crisis for essential staff.
The council will procure a Development Partner to deliver the much-needed affordable housing. The Rotherhithe New Road site may also include a new Family Hub, while the Cherry Gardens site could incorporate commercial space.
Councillor Alexandra Austin, Executive Member for Public Works and New Homes, presented the report, highlighting the importance of supporting key workers who are increasingly finding it difficult to afford housing in the areas where they serve. The Keyworker Housing (KWH) is defined as an affordable product, classified as intermediate tenure, and now defined in the relevant GLA policy launched in January 2026 as Keyworker Living Rent (KWLR). KWLR is a rental product intended to meet the needs of lower-income, essential workers who are not eligible for council tenancies, cannot rent or buy a home that meets their needs on the open market, and need to live in the borough within a reasonable distance of their place of work. Eligible tenants will need to comply with a maximum gross household income threshold. The Southwark Planning policy under the Affordable Housing Supplementary Planning Document (AHSPD) sets a tighter definition of Keyworker, specifically including teachers and teaching assistants (in non-fee-paying schools), social workers, police, firefighters, and NHS clinical staff. The AHSPD also promotes a model of rolling tenancies, which are reviewed regularly, and where tenants no longer meet the eligibility criteria, they will be signposted to other suitable housing options.
The rental prices for these homes will be capped at Key Worker Living Rent (KWLR) levels, calculated by borough. For Southwark in 2026/27, these are: £1,218/month for a 1-bed flat, £1,370/month for a 2-bed flat, and £1,518/month for a 3-bed flat (inclusive of service charge).
The council will underwrite 50% of the preferred bidder's costs, capped at a maximum aggregate of £2 million (£1 million per site). This underwriting sum would be payable only in the event of specific identified eventualities at the early stages, which include: failure to achieve Planning permission, unsuccessful grant draw-down, or unreasonable delays under the Building Safety Act Gateway 2 process exceeding an agreed programme period. The underwriting is not payable if the preferred bidder chooses to withdraw. This approach aims to transfer development and construction risk to an experienced partner while ensuring value for money.
The procurement process will be a Competitive Flexible Procedure, with the council entering into a Development Agreement with the preferred partner upon successful completion of planning consent and detailed negotiations. The Development Agreement (DA) is estimated to take a period of between 18-24 months to complete. Following this, the construction of the new homes is anticipated to commence in September 2027, with practical completion estimated for April 2030.
The Rotherhithe New Road site is located in the Rotherhithe ward and is the residual area of the rebuilt Rotherhithe Primary School, currently being regularised as housing land. This site may incorporate the delivery of a Family Hub to 'shell and core', which would provide multi-agency universal and targeted support as part of the council's prevention programme: Best Start Children and Family Hubs. Further needs analysis and operation cost-modelling will be undertaken by the council.
The 25 Cherry Gardens Street site, in North Bermondsey ward, is a split site. The western part of the site is held in the Housing Revenue Account and is the location of the former Neighbourhood Housing Office building, which is currently let to Orchard Hill College under a five-year lease that expires by 2030. The council is currently identifying long-term premises for the college. The site may also incorporate a ground floor unit space, to 'shell and core', which could serve as a commercial letting for the council.
These developments are part of Southwark's wider affordable housing ambitions and build upon the success of a pilot Keyworker Housing scheme at 177 Abbey Street. For more information on the council's executive decisions, see the Public reports pack for Tuesday 13 October 2026 here.