TOWER HAMLETS COUNCIL is moving forwards with its plans to redevelop Harriott, Apsley and Pattison Houses in Stepney – the “HAPS” scheme.

The Council has announced that the project will deliver 407 new homes. However, that is a gross number, as homes in the existing blocks will be knocked down to make way for the new flats. Of the new homes, some will be built to replace those that have been demolished; some will be sold to help fund the scheme; and some will be intended for shared ownership. Recent Cabinet papers suggested that just over 60 of the new properties will be additional homes available to those on the waiting list. That is the disappointing economics of providing new social housing.

The Council signed a Development Agreement and Phase 1 Construction Contract with Vistry on 7th April 2026. However, on 18th April Vistry’s share price fell after the firm issued a profit warning. The warning arose after the company ran into difficulties selling new-build stock.

We are all used to hearing that developers and landlords fund regeneration and redevelopment schemes by building homes for sale. However, house prices are pretty stagnant and mortgages are hard to come by and, if you have a mortgage, hard to afford. House-owners are not taking out larger mortgages to move to larger homes at the rate they used to when interest rates were lower.

Developers and landlords are also experiencing higher interest rates and higher development costs. Labour costs have risen and building inflation is running way over 20%. In some ways, this should not matter. The new economic reality may be reducing the level of profit that developers were making a few years ago, but there is a housing shortage and they should be able to sell a house and/or get a return on rent. But the numbers are not adding up and many developers have stopped taking on new schemes.

For the moment, it is all systems go with the Tower Hamlets Council and Vistry partnership. Executive Mayor Lutfur Rahman said, “By moving into the construction phase, we are turning our plans into reality and providing modern, safe and accessible homes, while tackling overcrowding and creating new opportunities for local people.” Let’s hope for the best.

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