Islington Council to Dispose of Old Street Properties

Islington Council is set to dispose of several properties in the Old Street area as part of a strategic review of its commercial property portfolio, aiming to mitigate financial risks including a forecast shortfall in commercial property income of £2.073m in 2025/27 and £2.336m in 2026/27. The decision, made during an Executive meeting on Thursday 26 June 2025, aims to generate capital receipts for the council, while also addressing the pressing need for affordable temporary accommodation.

The move aligns with the council's Strategic Asset Management Plan and its commitment to making effective use of land and building genuinely affordable homes in Islington. The Executive approved the disposal of four buildings on Old Street (29-33, 41-47, 49-59 and 69), recognising the changing dynamics of the office market and the persistent income pressures these properties pose. Market analysis has demonstrated a large surplus of low-grade office accommodation, similar to the council's assets, providing limited assurance of consistent and sizeable income over the medium to long term.

Councillor John Woolf, Executive Member for Homes and Neighbourhoods, introduced the report, highlighting the council's commitment to reducing risk and maximising its assets. The decision to dispose of the Old Street properties comes as the council faces a forecast shortfall in commercial property income, exacerbated by the termination of two large leases in the area. Difficulties in securing lettings, with landlords having to agree to significant rent-free periods, and substantial void, insurance, business rates, and security costs for the vacant Old Street properties have also contributed to the decision.

The expected market value of the Old Street properties is around £18 million, based on external red book valuations¹. A marketing strategy will be implemented to seek offers above these valuations after the approval to dispose is granted.

The council also approved the disposal of land near Stansted Mountfitchet, which is currently not generating any income. This disposal, combined with the Old Street sales, is expected to generate approximately £22.88 million in capital receipts, with the potential for an additional £2 million through an overage arrangement. These funds will be reinvested to support a sustainable Medium Term Financial Strategy (MTFS), potentially saving around £1.784 million per year. This strategy aims to offset the shortfall in commercial property income by reducing the Council's borrowing costs.

In addition to the property disposals, the Executive also outlined plans to convert vacant floors at 7 Newington Barrow Way into affordable temporary accommodation. This initiative aims to create 32 units, providing 104 bed spaces, and is projected to save the council approximately £0.250 million per year in temporary accommodation costs. The conversion will also contribute to securing £0.512 million of previously delayed FutureWork savings. The council will seek planning permission for the conversion, with works expected to commence from March 2026. Rents charged for the temporary accommodation will be at the Local Housing Allowance rate for the area, ensuring affordability for residents.

This is such a good news story, said Councillor Woolf, emphasising the importance of creating a safe place for all. The council will seek planning permission for the conversion, further demonstrating its commitment to tackling the housing crisis.

The Executive also reviewed the council's financial performance for the 2024/25 financial year, with Councillor Flora Williamson, Executive Member for Finance and Performance, hailing it as a really good news story that a balanced budget was achieved.

The approved recommendations are expected to have a positive impact on Islington's financial stability and housing provision, aligning with the council's broader goals for a thriving and equitable community.