Redbridge Council might lose a £5.5m grant towards planned housing in Seven Kings if it does not start work in the next year, a report has revealed.

In August 2020, the council’s housing developer Redbridge Living applied to build 236 flats in three towers on Seven Kings Car Park in High Road.

The plan was to use the profits to fund community, health and business space on-site but the Greater London Authority (GLA) threatened to veto the scheme unless there were more affordable homes.

Further delays ensued when, last September, council leader Jas Athwal announced Redbridge Living would be wound down as construction costs had “shot up”.

According to a report presented to council leaders, the development is now so delayed that the council risks losing out on a £5.5m grant for affordable housing from the GLA.

The report estimates the £82m development would make a £2.7m loss without the grant, describing it as “a major driver in whether the scheme is viable”.

It continues: “Among the relevant grant conditions are requirements to have secured planning consent, be in contract with a contractor and to have made a start on site before the end of March 2023.

“Should the grant not be forthcoming, it will require further reporting back to cabinet to consider the way forward.”

Although the cost of designs has not been made public due to commercial sensitivity, cabinet has now agreed a further £1.5m for the next stages.

The council’s head of regeneration Sharon Strutt told the overview and scrutiny committee on March 7 that, to make sure the scheme was “financially viable” after adding affordable homes, the number of three-bed flats was cut from 40 to 25.

Proposals for the community, health and business space include council services, a library, a GP surgery, co-working spaces and an enforcement hub.

In the new plans, 42 of the homes will be priced at London Affordable Rent (LAR), with 24 of these homes offering three bedrooms.

The remaining flats will be one or two bedrooms, with 35 sold under shared ownership and 159 for private sale.

Conservative deputy leader Howard Berlin said: “I don’t understand why it’s not viable. What the council is saying is: 'we’re building on our land and we can’t make any more money', which is very odd.”