City Hall has approved a revised planning application for the Canada Water Masterplan which will see just 9 per cent affordable housing delivered on site instead of the 35 per cent originally offered.

On Friday afternoon (March 27), the Deputy Mayor for Planning, Regeneration and the Fire Service, Jules Pipe, chose to grant planning permission for a Section 73 application from developers British Land and AustralianSuper, despite warnings that it will set a “dangerous precedent” for future regeneration schemes.

Southwark Council granted planning consent for the Canada Water Masterplan back in May 2020 for the construction of 2,815 homes – of which 35per cent would be affordable – along with 4.7million sq ft of retail, office and leisure space. The development has been dubbed “London’s first new town centre in 50 years” by the developers.

But by January 2025, British Land submitted a Section 73 application which allows a developer to make amendments to the original planning consent, due to changes to building regulations and encountering sector-wide cost and viability challenges.

The Section 73 application included new heights for future buildings and an increase to the total number of homes built on the 53-acre site to around 3,000 – though there is potential to deliver up to 4,184 homes altogether. British Land also proposed a reduction in the original affordable housing offer from 35 per cent to just 10 per cent overall.

Southwark Council was supposed to decide on the amended proposals but missed the April 2025 deadline. At the end of last year, British Land wrote to the Mayor of London, Sir Sadiq Khan, warning that any further delay would “significantly impact on their potential to deliver the substantial benefits that the scheme provides”.

The letter also included an updated financial viability assessment which warned that 3 per cent was “the maximum viable affordable housing at this stage, with the potential for public funding to increase this with delivery in the next phases”.

Sir Sadiq chose to ‘call in’ the application, and concluded that the development “would significantly contribute towards the delivery of housing in London”.

This affordable housing figure has now increased to 9 per cent after the Mayor of London recently provided the £4billion regeneration scheme with a grant which means up to 270 homes out of 3,000 will now be affordable.

The revised proposals have faced huge opposition from Southwark Council, local ward councillors for Rotherhithe as well as housing campaigners and local residents who have been highly critical of the reduced affordable housing offer.

During Friday’s public hearing at City Hall, Gemma Usher from Southwark Council’s Strategic Team, said: “The scheme was called in by the Mayor before it could be reported to our planning committee for their determination, we therefore don’t have a formal decision of the council as the planning authority.

“I can confirm though that the council’s administration has expressed the same view that the public benefits of the scheme and in particular the low level of affordable housing provided do not justify the harms caused by the scheme arising from its increase in scale.”

A housing waiting list of nearly 23,000

Jerry Flynn, of the 35% Campaign, said: “The Canada Water development is probably the biggest Southwark has ever seen, however nearly all of the 4,000 homes it [could] provide will be free market housing when our overwhelming need is for affordable housing.

“The Southwark Plan shows this quite starkly, it shows that 93 per cent of households would qualify for affordable housing and that only 7 per cent of households can fully afford free market housing.”

He added: “Our housing waiting list of nearly 23,000 households further testifies to the acute need for social housing in particular, in the face of this the applicant’s baseline affordable housing offer is a meagre 3 per cent which they say has already been delivered.

“This offer has been increased to 9 per cent but only by virtue of public funding. In other words, we are paying for the increase.”

Jed Holloway, a planning solicitor from the Southwark Law Centre, said approving the revised application would set a dangerous precedent for all schemes to come. Mr Holloway also hit out at British Land’s plans to introduce co-living accommodation to the scheme as an alternative housing model, which was not part of the original consented scheme.

He said: “We cannot continue to allow the costs of the housing crisis to fall on the public purse and local communities; wasting the biggest sites in the name of delivering private housing that demonstrably fails to meet local need.

“Co-living [accommodation] is not permitted under the existing description of development which a Section 73 application cannot change. Therefore, we argue it would be unlawful to grant the application.”

Affordable housing offer will ‘do nothing’

Cllr Stephanie Cryan, a Rotherhithe ward councillor, argued the 9 per cent affordable housing offer will “do nothing” to help meet the needs of local residents in need of social and affordable housing. She explained that the immediate area of SE16 has 2,785 households on the council waiting list, with 713 in need of three or more bedrooms and 861 households in overcrowded homes.

Cllr Cryan said: “There is a real risk if the application is approved of Canada Water becoming an enclave of the wealthy… whilst those living in surrounding areas including long-established council estates believing that there is nothing of benefit to them.”

Fellow ward councillor, Bethan Roberts, added: “[Local residents] have raised concerns with us throughout the current planning proposal and this application just goes to erode trust in the scheme even further.

“We’ve lost the cinema, we’ve lost affordable workspace, we’re now slashing affordable housing provision, we’ve lost the police station – this litany of broken promises is something our residents cannot abide and won’t stand for.”

She added: “This was never scrutinised by elected members of Southwark Council before it was called in so our residents haven’t had their voices heard.”

Cllr Kath Whittam, who also represents Rotherhithe ward, urged the GLA to provide the grant funding to the council so it could build “council homes for council families who are waiting for family-sized housing”.

‘Canada Water has stagnated’

Local resident, Michael Robertson, said: “At the hands of the applicant, Canada Water has stagnated and the applicants have run the existing shopping centre into the ground. The local community hub has been a gargantuan flop and the shopping centre is now 65 per cent void as the applicants’ controlled leases and controlled rents are untenable at national and local level.”

Michael Meadows, Head of Planning and Public Affairs at British Land, said the first phase of the Masterplan had delivered 79 social rent homes, and more than £10million had been spent on revitalising Canada Dock including the 170metre boardwalk as well as 186 homes at The Founding.

Additionally £13million has been spent towards new step-free access at Surrey Quays Station, as well as £2.6million on improving Canada Water Station.

Mr Meadows said: “Granted planning permission today will enable the currently stalled Masterplan to progress, securing investment and ensuring much-needed housing is accelerated.

“If approved, the revised Masterplan will deliver 150 social rent homes on Zone L starting on site from 2027 [which is] equivalent to 20 per cent policy compliant affordable housing in the next phase of development.”

He said there was potential for more affordable housing to be delivered in future phases of the Masterplan but this is subject to viability reviews.

Mr Meadows said: “We are ready to start building again to deliver 150 social rent homes in the next phases of development but we need an investable planning permission, one that reflects structural changes and the London market and supports house building.”

The meeting was adjourned for just over an hour while Mr Pipe considered the application in private.

Ultimately, the Section 73 application was approved, meaning British Land and AustralianSuper have been allowed to make the revised changes to the Masterplan.

Citing his reasons for granting the revised plans, Mr Pipe said: “Although the level of affordable housing has reduced since the 2020 consent and the public benefits are therefore reduced, the award of the grant to increase affordable housing is a material consideration weighing in favour of the application.

“The design layout and massing of the scheme are well considered in the context of site constraints particularly for those arising from strategic views and heritage assets and would optimise development capacity.”

British Land began the construction of the very first buildings in mid to late 2021. The development is being delivered phase-by-phase, and planning permission will still need to be secured at each stage.

The entire development spans a 10 to 15-year timeline which could take the completion date all the way up to 2036.