Construction on most sites in a Redbridge Council affordable housing programme has been "heavily delayed", a report has revealed.
The authority first committed to building 600 “permanent, affordable council homes for rent” in 2019 but has so far only completed 96.
Since February 2020, the overall estimated cost of the project has jumped by £66million to a total of £201million.
According to a report approved by cabinet, construction has started on 282 homes but six of the nine sites have been “heavily delayed” due to increases in costs.
Three of the sites have now restarted work after a “long and protracted value engineering process” and three are currently being “re-procure[d]”.
The report said: “The programme is encountering the most difficult market conditions ever experienced.
“The construction market as a whole for both private and public sector has overheated, with price increases and labour shortages affecting all projects.”
Speaking to the council’s overview and scrutiny committee on Monday July 18, director of the affordable homes programme Paul Shafer blamed the delays on a “perfect storm” of Brexit, Covid-19, the war in Ukraine and increasing costs.
He added the council is trying to “bring costs down” but the estimated price of building per square metre is “fluctuating” between £3,000 and £5,500.
To save money, the council has also taken demolition and external landscaping out of the construction contracts.
The cabinet has consented to continue the next phase of its housebuilding programme and delegate further decision making to corporate director of communities Nicky Fielder.
The Greater London Authority has also agreed that money from its Homes for Londoners fund can be used by the council to buy 55 affordable homes in council-led developments in Clements Road and Loxford Lane, Ilford.
The report on the affordable homes programme adds: “The affordable units at Clements Road and Loxford Lane… will therefore be discounted from the market value (approximately 40%) providing much needed financial breathing space for the overall programme.”
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