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Hundreds of first-time buyers promised cut-price homes at Battersea Power Station will no longer be able to buy into London’s most-hyped regeneration zone, we can reveal.

Originally, 636 homes were earmarked by the Battersea Power Station Development Company for first time-buyers and renters unable to afford the mega prices asked for the 4,239 luxury homes on the power station site.

Now the development company says the entire project may become financially unviable if it is forced to stick to the 2011 promise to include so many affordable homes. It says it made the undertaking when London’s new-build market was booming and construction costs were lower.

Instead it wants to offer 386 affordable homes — or nine per cent of the total. The remaining 250 affordable homes would only be provided following an “end of scheme review”, a complex financial assessment of the profits the development company will make.

Battersea Power Station - in pictures







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1/21 Battersea People throwing brightly coloured powder in the air during the Holi One Festival, at Battersea Power Station in London. PA

2/21 Battersea A giant inflatable pig flies above Battersea Power Station on the banks of the river Thames in central London, during a recreation of the cover of the Pink Floyd album 'Animals' PA

3/21 Battersea 27th July 1932: Construction workers take a lunch break with the 300 ft high chimney of Battersea Power station, which is nearing completion, in the background Getty Images

4/21 Battersea 10th July 1933: The control room of Battersea Power Station, from which the feeders supply various regions of London with electricity. Getty Images

5/21 Battersea circa 1934: Battersea Power Station under construction in London. The building was designed by leading architect Giles Scott in the Gothic style. Getty Images

6/21 Battersea 12th February 1937: Smoke belches from the famous chimneys of London's Battersea Power Station. Getty Images

7/21 Battersea A general view of the new heliport site under construction in London. PA

8/21 Battersea 9th July 1981: A crane fitted with a huge magnet clears metallic debris from the 'A' turbine hall of Battersea Power Station, London. The landmark building, designed by Sir Giles Gilbert Scott is gradually being closed down and gutted. (Photo by Ian Tyas/Keystone Features/Getty Images) Getty Images

9/21 Battersea The London 2012 bid logo is displayed on Battersea Power Station, central London. PA

10/21 Battersea PA

11/21 Battersea A snowboarder on the ski slope at Battersea power station in London for the Freeze Snow and Music Festival. PA

12/21 Battersea Battersea Power Station in south west London, where preparations are underway to dismantle and rebuild the four chimneys as part of the redevelopment of the 1930s power station. PA

13/21 Battersea PA

14/21 Battersea PA

15/21 Battersea PA

16/21 Battersea The World's first amphibious Ice Cream Van, called the 'HMS Flake 99', as it passes Battersea Power Station by the River Thames in London, to mark National Ice Cream Week. PA

17/21 Battersea Helen Skelton walks on a tightrope between two of the chimneys at Battersea Power Station, London. PA

18/21 Battersea Models on the catwalk during a rehearsal for the Matthew Williamson Spring/summer London Fashion Week show, at Battersea Power Station in London. PA

19/21 Battersea Around 500 actors for The National Youth Theatre of Great Britain perform S'Warm at Battersea Power Station in London to raise awareness of the alleged global environmental crisis caused by dwindling bee populations. PA

20/21 Battersea A competitor takes part in a practice session ahead of the London leg of the Red Bull X-Fighters freestyle motocross tournament, which takes place at Battersea Power Station, London, on Saturday August 14. PA

21/21 Battersea A general view from the north side of the embankment. PA

HOW MUCH PROFIT IS 'VIABLE'?

Exactly how much profit the development needs to be deemed “viable” has yet to be decided, but a report by council planning officer Dan Taylor, to be considered by Wandsworth’s planning committee, suggests between 15 and 20 per cent. The proposals are expected to be rubber stamped by the council.

“The applicant considers that the introduction of a review mechanism would ensure that the maximum reasonable amount of affordable housing is determined at a point in the project when actual costs and values are known, and many of the uncertainties currently facing the project have been settled,” explains Taylor.

NO PUBLIC CONSULTATION

Because the change has not been submitted as a new planning application but as a “deed of variation” to the existing planning consent, there has been no public consultation on the proposal – though “notices were put up around the site”.

Wandsworth council alerted the Greater London Authority to the proposal. The GLA chose not to intervene.

If the housing market improves the homes could be saved, and possibly extra funding offered towards more affordable housing elsewhere in London. However, financial advice given to the council by consultants BNP Paribas warns that it is “very unlikely” the 250 homes will be provided, let alone added to.

BENEFITS FOR WANDSWORTH?

Recommending the changes be allowed, planning officer Dan Taylor points out that the power station scheme will have benefits for the borough beyond affordable housing.

“Officers appreciate the level of stress a scheme of this size and complexity has,” he says. “The main priorities of the scheme have been the conservation and redevelopment of the listed power station building, the delivery of the Northern line extension and new Underground station and the jobs to be created as part of the new town centre.”

Reuben Young, head of policy & communications at PricedOut, the campaign for affordable house prices, says: “Just because there is a stall in house price inflation does not mean that developers should be allowed to scale back the affordable housing commitments they negotiated during planning.”

A spokeswoman for Battersea Power Station says “technical issues” around renovating the Grade II* building and the weakening pound have pushed building costs up on the site, adding that sales of commercial property remain strong, and the company is hopeful that the 250 homes will still be provided later in the project.

Government policy allows for “flexibility”, she says. “Policy requires developers to provide the maximum reasonable amount of affordable housing. This is what the Battersea Power Station scheme is delivering, as well as restoring a decaying national monument … contributing £211 million to the Northern line extension, opening up 18 acres of public realm, creating 20,000 new jobs and enabling £20 billion of investment into the UK economy.”