BexleyCo, the council's development company, has had its profit forecast reduced due to slower sales at its West Street development, with market challenges impacting first-time buyers.
The overall forecast development profit has slightly decreased to £24.203 million, with an expected profit after tax of £15.836 million. Councillors were informed that sales at the West Street development have been slower than anticipated. To address this, BexleyCo has adopted a hybrid sales and rental model for the site.
Market conditions, including construction inflation and the Building Safety Act, are presenting challenges, particularly affecting the delivery of affordable homes. First-time buyers are finding it very, very difficult to get onto the housing market, particularly with the cost of living and needing to raise a deposit and also interest rates remaining, mortgage rates remaining steadily high.
Despite these market headwinds, progress has been made on other development sites. The former Sidcup Library site has seen completion and really strong initial sales performance in the south of the borough.
Sales launched late 2025, and to date, 16 apartments have been sold. However, progress has slowed in recent months due to the challenging market conditions for first-time buyers or those with a property to sell.
Work has also commenced on the Bursted Woods development, with planning consent achieved. This site gained planning consent for 121 new homes, comprising 8 three-bedroom houses and 113 one, two, and three-bedroom apartments, including 18 affordable homes. The development retains the listed former maternity hospital, which will be converted to residential use. The first new homes are expected to be ready for local people in November 2027, with the site being delivered in four phases.
Councillors noted the progress against BexleyCo's business plan, acknowledging the challenging market conditions affecting the construction and housing sectors. The report highlighted that while sales have been slower than anticipated, BexleyCo is actively managing risks and exploring flexible approaches to address these market challenges. The overall expected profit after tax over the duration of the business plan is forecast to be £15.8m compared to £16.5m in the business plan. The forecast peak debt is lower than anticipated in the business plan.
