Housebuilder Barratt has withdrawn from a £6 billion development project in Enfield, north London following a disagreement with the local authority over terms.
Enfield Council said it had informed Barratt its proposed bid terms for the Meridian Water development project were unacceptable.
It added that talks with the builder had been terminated after it formally withdrew its interest.
A Barratt/Segro joint venture was named the preferred bidder for the Meridian Water development in May 2016.
The project, described as the one of the largest housing developments in London, is expected to produce 10,000 homes.
It covers a 210 acre site between Edmonton, Tottenham and Walthamstow, and includes supporting infrastructure, a railway station and retail space.
Enfield Council and Barratt declined to comment on what terms they had disagreed over, while Barratt did not say how much the project would have been worth to the company.
“We were simply not prepared to sign up to what we considered to be a poor deal for the residents and businesses of Enfield,” the council said.
It added that Barratt refused to commit to “a number of key elements of its own bid”.
Enfield Council said the decision will not impact the timetable for delivery and that it will continue to work with companies across the private sector to complete the project.
A spokesperson for Barratt told Construction News: “Barratt London has a long and successful history developing large regeneration projects in the capital, but unfortunately we have been unable to agree terms on this particular scheme.”
Meanwhile, commercial property company Segro said it hoped it could still deliver its section of the project.
“Segro has a strong track record of investing in Enfield … We are disappointed that negotiations have come to an end … but we still hope to deliver the e-commerce centre which could create up to 2,000 jobs,” the company told Reuters.
A venture between Balfour Beatty and Hong Kong-based Pacific Century Premium as well as Berkeley Homes were the rival bidders on the project.
The news comes after a corruption scandal rocked Barratt Developments earlier this year, resulting in the suspension of senior executives.
The staff had reportedly adopted a bias when awarding contracts for new housing developments.
DealMakerz thinks Barratt will have a big job on its hands to improve its image among investors and customers.
The collapsed deal is perhaps a sign that Barratt is concerned about the future of London’s housing market.
Uncertainty around Brexit and a potential rise in interest rates is stalling growth across the capital, with average property prices falling this year for the first time since the financial crisis.
Hopefully another developer will be found soon. London certainly needs new homes – the latest industry data shows housing starts fell by more than a third over the past year, despite the acute shortage of houses in the capital.
The issue looks set to be a key pillar of the upcoming Budget. The Chancellor is said to be considering moves to allow the Government to free up public land and directly commission housebuilders, alongside other measures to tackle “gazumping” and help first-time buyers.