Southern Housing has appointed Formation Design & Build to complete a stalled housing development in Croydon, after the original contractor, Henley Construct, went into administration in April 2023. The project, situated on Cherry Orchard Road, had been left in limbo following Henley Construct’s collapse, which halted construction at multiple sites and left the contractor owing millions to suppliers.

The Cherry Orchard Road scheme, initially valued at around £35.2 million, involves the construction of a nine-storey building containing a mix of studio, one-bedroom, and multi-bedroom flats. The development also includes private and communal amenities, refuse and recycling storage, cycle parking, car parking, and sustainable drainage systems, along with hard and soft landscaping. Associated infrastructure works such as sewer systems, cable laying, and access roads are also part of the project. Formation Design & Build, a West London contractor with a focus on residential projects across the capital, has been appointed to finish the development. While the value of Formation’s contract has not been disclosed, the company has experience with large-scale residential and redevelopment projects in London, including a £100 million redevelopment of a refuse depot in Tottenham Hale.

Southern Housing, which merged with Optivo in late 2022, suffered financial setbacks due to the collapse. It has lodged a claim with Henley’s administrators, 360 Insolvency, for losses and damages amounting to £36 million related to Henley’s work on several projects, including two other South London developments in Thornton Heath and Tulse Hill. At the time of collapse, Henley owed £6.7 million to 221 suppliers and subcontractors, most of whom are unlikely to recover any of their owed funds, according to an April 2025 report from the administrators.

Planning documents underpinning the Cherry Orchard Road site show the proposed building is designed to meet contemporary residential needs with a variety of flat sizes and communal amenities, alongside sustainable infrastructure measures. However, the development faced delays extending beyond Henley’s collapse. Investment and planning complications, compounded by rising material and labour costs, had already slowed progress, with the project’s restart pushed to mid-2025. This context reflects wider challenges facing London’s housing sector, where ambitious development targets often collide with financial instability among contractors and supply chain disruptions.

Henley Construct’s sudden administration has had a pronounced impact not just on Southern Housing but on other housing associations in the region as well. Industry observers highlight the difficulties local authorities and housing providers face in delivering new homes on schedule, a problem exacerbated by contractor failures and market pressures. This illustrates the broader fragility within the residential construction sector, where the fallout from a single contractor’s collapse reverberates through multiple projects and stakeholders.

As Croydon and other parts of London continue to seek new residential developments, projects like Cherry Orchard Road underscore the importance of financial resilience and project continuity planning. The appointment of Formation Design & Build to complete the scheme offers a hopeful step toward realising the much-needed homes, but the episode remains a cautionary tale about the vulnerabilities in the housing construction ecosystem.

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Source: Noah Wire Services