Council to Abandon Major Development in Southall

Scheme known as The Green became unviable after Peabody pulled out

A visualisation of the now scrapped development. Picture: Peabody

November 11, 2025

Ealing Council’s cabinet will be presented with a report next week recommending that a project to build 564 flats in Southall be abandoned. It concludes there is no other option to withdrawn from The Green development after the housing association which was going to deliver the affordable housing component of the scheme, which made up half the units, pulled out earlier this year.

Cabinet papers published ahead of a meeting on 12 November propose terminating the Development Agreement and the Compulsory Purchase Order Indemnity Agreement for the a two-hectare parcel if land a short walk from Southall station. The project had already obtained planning permission.

Peabody informed the council earlier this year that rising construction costs, labour shortages, the impacts of the Building Safety Act 2022 and an unstable sales market had together made the approved scheme unbuildable within the terms of the original agreement. The council says officers have worked with the housing association and with GLA officials to explore alternatives, but the developer’s viability assessment was judged to show a significant and not marginal shortfall, leaving termination as the pragmatic option.

The report asks councillors to delegate authority to the council’s Strategic Director of Economy and Sustainability to agree and enter a commercial Termination Agreement with Peabody, and to decommission a previously allocated capital budget of £16.4 million for the project. It also recommends the council will not pursue implementation of the existing planning consent nor use the CPO powers for the site; the CPO itself is due to expire in May 2026.

The Green formed part of the Southall Opportunity Area, a wider policy framework that envisaged thousands of new homes and new jobs for the town centre. The cabinet report stresses that while the consented scheme will not proceed, Southall remains a regeneration priority and officers are already exploring alternative, employment-led and mixed-use approaches framed by the council’s Southall Reset programme and the emerging local plan.

Council documents make clear the termination is driven by wider market and regulatory pressures that have affected many London projects since 2019. The report lists higher material and energy costs, interest-rate uncertainty, an oversupply of market sale housing and the Building Safety Act’s requirement for additional means of escape in taller buildings as central to Peabody’s case that the development could not be delivered viably.

. The report says the council has already received deposits and a proportion of consultant and administration fees from Peabody and that the negotiated Heads of Terms of the Termination Agreement are intended to protect the council from foreseeable costs arising from the scheme’s collapse..

The Mayor of London has been considering revisions to affordable housing targets and the policy frameworks that shape how much affordable housing new developments must provide. Any changes being considered by the Mayor could reshape viability calculations for large schemes and influence whether local authorities and registered providers can secure the funding needed to deliver large numbers of genuinely affordable homes.

Ealing’s cabinet paper notes that terminating the agreement does not end the council’s ambition to deliver affordable housing. It points to other ongoing schemes and actions, including bulk purchases of new-build homes from private developers and the council’s new Great Homes Better Lives housing strategy for 2025–30, as part of a wider programme to meet a target of 4,000 genuinely affordable homes.

The council retains key land assets on the site, including the Featherstone Terrace car park and the Medina Dairy Factory site, and says it will pursue community-led, partnership-based options for future redevelopment rather than invoking compulsory purchase again.

Councillors will consider the recommendations on 12 November, and officers say they will also develop a communications plan to explain the orderly exit and future plans for the area.

An Ealing Council spokesperson said, “Peabody has decided to withdraw from the development project, as long-standing challenges mean it is no longer financially viable to construct.

“There has been no undue cost to the Ealing taxpayer, with appropriate costs being recovered by the council from Peabody.

“Notwithstanding the current economic challenges, which are outside of our control, delivering genuinely affordable homes for the borough remains a key priority for us. A good quality, safe place to call home is the fundamental foundation needed for a decent life.

“This year we have completed and let homes at Copley Close and Buckingham Avenue. We continue to secure new affordable homes in private developments through our planning processes and negotiations. And we have also responded decisively and innovatively to challenging market conditions by buying homes in bulk from private developers previously intended for private sale to let to council tenants instead. We have recently finalised deals to acquire 290 homes currently under construction in Acton and Southall . Finally, our new housing strategy sets out a long-term vision to deliver homes that meet the needs of our residents ”