Housing association set to seal rescue deal on Olympic village

Housing association Southern Housing Group has reached an “in-principle decision” to help build the Olympic village, it was confirmed today.

In a statement, the Olympic Delivery Authority (ODA) confirmed that the social landlord has been drafted in to the project, as reported in Building on Friday.

If a full deal is signed, Southern will join existing developers Lend Lease, First Base, and East Thames Group working on the project. Lead developer Lend Lease has been so far unable to raise the £1bn project finance to build the scheme because of the credit crunch, and initial works are being funded by the taxpayer.

Building reported on Friday that the proposed deal with Southern Housing Group was a key milestone in allowing a new funding agreement with Lend Lease to go ahead.

An ODA spokesman said: “The Southern Housing Group has reached an in-principle decision with First Base and East Thames about joining the consortium for the provision of the affordable housing elements of the Olympic village development.”

He added that the deal will have to gain regulatory approval and the approval of Southern Housing Group's board.

The spokesman continued: “Discussions over the long-term financing of the Olympic village will continue into the new year and, in the meantime, construction work on site is making strong progress so the project is firmly on track.”