Berkeley Group Warns London Investment at Risk After Peckham Planning Rejection
Berkeley Group, London’s largest housebuilder, has warned that developers “can no longer invest in new London sites” after a planning inspector rejected its proposal to replace a derelict Peckham shopping centre with 867 new homes — a decision the company says it may challenge in the High Court.
Inspector Rejects Scheme Despite Acknowledging Benefits
Planning Inspector Matthew Shrigley dismissed Berkeley’s appeal on 18 May, ruling that the proposed redevelopment of the Aylesham Centre in Peckham would cause unacceptable harm to nearby heritage assets. The inspector acknowledged that the scheme would “rejuvenate the area” and deliver “social and economic benefits,” but concluded that these gains were not sufficient to outweigh the design concerns.
The proposed development would have comprised 867 flats across 13 tower blocks, some reaching 20 storeys — the largest single redevelopment in Peckham in a decade. Shrigley described several of the proposed towers as “out of scale” and “visually intrusive.”
Berkeley Raises Alarm Over Planning System Viability
Rob Perrins, Executive Chair of Berkeley Group, responded sharply to the ruling. “How can we be allowed to build next to world heritage assets like Tower Bridge, but not here?” he said. “If we’re no longer permitted to meet housing needs on brownfield land, then where should we build?”
Perrins warned that the decision exemplified “extreme uncertainty” within the planning system and would deter investment across the capital. Berkeley has said it is now considering “all options,” including a potential judicial review in the High Court.
The case reached the Planning Inspectorate after Berkeley bypassed Southwark Council’s planning committee in May 2024, appealing directly to the government on grounds of non-determination. The council had neither approved nor refused the application within the statutory timeframe.
Affordable Housing Concessions Failed to Secure Approval
The episode exposes the precarious economics of urban development. Berkeley’s original scheme included 35% affordable housing by habitable room — comprising 185 social rented and 85 intermediate homes. That figure was later cut to just 12%, below the 20% emergency threshold set by the government as part of its housebuilding acceleration package.
The company attributed the reduction to funding uncertainty from the Greater London Authority, delays in securing planning consent, rising construction costs, and regulatory changes. Even so, the inspector stated that he would have rejected the scheme regardless of whether the original 35% affordable housing commitment had been honoured.
Housing Delivery Targets Recede Further
The rejection carries wider implications for national housing policy. In 2024–25, Southwark recorded just 1,020 housing completions against a London Plan target of 2,355 — a shortfall of more than 56%. The Aylesham decision further undermines the government’s stated ambition to deliver 1.5 million homes during the current Parliament.
Berkeley acquired the Aylesham Centre site in May 2021 from a joint venture between BlackRock and Tiger Developments. Redevelopment proposals for the site date to 2014, when it was first identified in the Peckham and Nunhead Area Action Plan.
Local Opposition Celebrated the Ruling
Southwark Council leader Sarah King described 18 May as “a great day for Peckham,” crediting community campaigners for making their concerns heard at the public inquiry. Victor Chamberlain, leader of Southwark’s Liberal Democrat group, called it “a major victory for local residents.”
The Aylesham Community Action group, which raised more than £55,000 to fund legal representation at the inquiry — aided by a fundraising event featuring comedians James Acaster and Nish Kumar — argued that any future scheme must involve genuine grassroots input. Spokesperson Siobhan McCarthy said the inspector’s ruling represented “a generational opportunity for Peckham.”
A Cautionary Signal for Urban Regeneration
The outcome illustrates a persistent tension in British planning: the system’s capacity to block development on heritage and design grounds, even on brownfield land in areas of acute housing need, with limited accountability for the consequences of inaction. Berkeley’s threat to exit London as a development market is unlikely to be an idle one.
With Southwark already delivering fewer than half its allocated homes and the government’s 1.5 million target looking increasingly implausible, the Aylesham rejection is a reminder that planning reform — not merely headline targets — will determine whether Britain’s housing crisis is addressed or merely managed.