Bermondsey Place affordable housing has fallen sharply in the latest phase of the Old Kent Road regeneration, with Southwark councillors backing 1,060 homes while accepting 12% affordable housing by habitable room for the new phases.
Planning Committee (Major Applications) A considered application 25/AP/2987 on 6th October 2026. The resolution to grant remains subject to a Section 106 agreement and referral to the Mayor of London, so this is not yet an issued planning permission.
The change is striking because the extant 2020 permissions required 40% affordable housing. Southwark’s officers accepted viability evidence that the remaining phases could not support that level in current market conditions, while securing early, mid and late-stage review mechanisms intended to capture extra affordable housing if viability improves.
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Bermondsey Place affordable housing drops from 40% to 12%
The site sits in the Old Kent Road Opportunity Area at Malt Street. The latest application covers Phases 2 and 3 and proposes eight buildings between six and 36 storeys, containing 1,060 homes.
Southwark’s officer report records 979 market homes, 56 social rented homes and 25 intermediate homes. That gives 81 affordable dwellings and 363 affordable habitable rooms, equal to 12% of the total by habitable room.
The previous combined Malt Street and Nye’s Wharf consents allowed up to 1,453 homes and 8,193 sq m of commercial and employment floorspace. They were tied to 40% affordable housing by habitable room.
Phase 1 is already under construction and is expected to deliver 285 homes, with 40% affordable housing by habitable room. The new application replaces the unimplemented balance rather than reopening Phase 1.
Why the applicant said the old consent could not be built out
The council’s report says the applicant argued that significant changes in economic and regulatory conditions since 2020 had made the remaining phases unviable. Those changes include higher finance costs, inflation, build-cost pressure, weak growth in apartment values and additional delay and cost associated with the Building Safety Act gateway process.
The Building Safety Levy, which came into force in England on 1st October 2026, was also identified as a new cost pressure. Southwark commissioned independent viability scrutiny and officers concluded that the proposed 12% represented the maximum viable provision on the submitted appraisal at this stage.
This is an important distinction for practitioners. Planning policy may set a target, but viability evidence can still affect what is secured where a scheme cannot reasonably support the full policy requirement. The argument succeeds or fails on the quality, assumptions and transparency of the appraisal.
Planning Geek recently reported a similar viability issue in the Staplehurst 81-home appeal, where an Inspector accepted that a development could not viably provide the policy-compliant level of affordable housing.
Three viability reviews are intended to claw back more
Southwark has not accepted 12% as an immutable ceiling. The proposed Section 106 agreement includes early, mid and late-stage viability reviews. If values, costs or profitability move in the applicant’s favour, those reviews can require additional affordable housing or an equivalent contribution.
That matters because the officer report assumes a lengthy build programme. Pre-construction for the new phases is notionally expected from September 2027, with construction potentially extending into the early 2040s. Market conditions over that period could look very different from those used in the current appraisal.
Across all three phases, including the 40% provision already secured in Phase 1, the minimum affordable housing position is expected to be about 17.9% by habitable room before any uplift from later reviews.
The latest scheme is smaller than the extant permission
The revised masterplan would produce 1,345 homes across the whole Bermondsey Place site when Phase 1 is included, compared with up to 1,453 homes under the extant permissions.
Commercial and employment floorspace would also fall, from 8,193 sq m under the extant permissions to about 4,269 sq m under the revised scheme and Phase 1 together. The tallest proposed building in the new phases is 36 storeys, lower than the 44-storey maximum in the earlier consent.
One block has been removed and other changes have been made to massing, building footprints, servicing and the relationship with new public space. Officers considered the revised masterplan capable of delivering a more coherent layout while still making intensive use of a major brownfield regeneration site.
Public realm, BNG and transport remain substantial parts of the package
The application includes a significant extension of the Surrey Canal Linear Park and a new central square. More than 200 trees are proposed, and the scheme is expected to achieve an Urban Greening Factor score of 0.4.
The officer report records a proposed biodiversity net gain of 26%, above the statutory minimum. Green and blue roofs, swales, permeable paving and attenuation storage form part of the drainage strategy.
The development is intended to be effectively car-free apart from blue badge spaces. It proposes 1,901 long-stay cycle spaces and 58 short-stay spaces, alongside highway works, bus contributions and a cycle-hire contribution.
Heritage harm was accepted but weighed against regeneration benefits
The site itself is not within a conservation area, but several conservation areas and listed buildings lie nearby. Officers identified less than substantial harm to the setting of some heritage assets, generally at the lower end of the scale.
The public benefits relied on included the scale of housing delivery, affordable housing that officers considered viable, employment floorspace, new public realm, biodiversity and environmental improvements, and the wider regeneration of the Old Kent Road Opportunity Area.
Why the decision matters beyond Bermondsey
The useful point is not that a 40% affordable housing requirement has somehow become 12% policy. It has not.
The decision shows how a long-running major scheme can be reworked when an extant permission becomes difficult to deliver. Keeping an undeliverable permission on paper may preserve a policy-compliant number, but it does not build homes. Accepting a lower initial contribution can unlock delivery, but it transfers more of the risk to future viability reviews.
The committee’s decision is therefore as much about delivery as percentages. The Section 106 review machinery will be crucial. If the scheme’s economics improve during its long build-out, the council will expect to recover some of the affordable housing lost at this stage.
The Southwark committee agenda and officer report set out the application, viability position, design changes and proposed planning obligations.
Planning Geek view
A drop from 40% to 12% affordable housing is substantial and deserves scrutiny. The right professional question, though, is whether the revised scheme, assumptions and review mechanisms represent the best deliverable outcome when compared with the realistic fallback.
The next stages matter. The resolution remains subject to the legal agreement and Mayoral referral, and the detailed drafting of the viability reviews will determine how effectively Southwark can capture future upside.
For developers, landowners and councils dealing with stalled consents, the lesson is clear: the viability case has to be built around evidence, while the planning obligation has to be drafted for the possibility that today’s market conditions do not last.
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