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The financial fallout from a wave of construction insolvencies, most notably the demise of Henry Construction Projects (HCP), has dealt a major blow to one of the UK’s largest affordable housing providers, The Guinness Partnership. The association, which manages nearly 70,000 homes across England, has been pushed into a £10.5 million pre-tax loss for the year ending March 31, 2025—a drastic swing from the £68.2 million profit recorded the previous year.
The significant deficit was largely attributed to £21.4 million in impairment charges, which the Partnership stated reflected a combination of rising construction costs, lower sales values, and major delays stemming from the failure of key contractors.
Focus on Tower Hamlets: Leaside Lock Scheme
The central casualty of this collapse in East London is the flagship Leaside Lock development in Bromley-by-Bow, Tower Hamlets. This ambitious project aims to deliver a total of 965 new homes, with a substantial proportion dedicated to affordable housing, including 135 homes for affordable rent in the final phase.
HCP was the principal contractor for the third and final phase, involving the construction of 321 homes across three towers and six townhouses, when the firm entered administration in June 2023. This insolvency brought work to a standstill, leaving the critical housing delivery programme severely disrupted.
The Guinness Partnership successfully appointed Lovell Partnerships as the replacement contractor to finish the job. Significant progress has since been made, with the final phase reaching its topping-out ceremony in early July 2025. Despite the setback, the revised completion date for this vital block of new homes in Tower Hamlets is now anticipated for late 2026.
The Guinness Partnership noted that the final phases of Leaside Lock are being delivered with funding support from the Mayor of London under a GLA Strategic Partnership, underscoring the scheme's importance in addressing Tower Hamlets' acute housing need.
Wider Sector Impact
The collapse of Henry Construction Projects has created a damaging legacy that extends beyond Guinness. The company owed an estimated £43 million to suppliers when it failed.
- Another former HCP project—a separate £92 million build-to-rent job also in East London—was previously announced to be facing a two-year delay.
- Furthermore, in a major safety concern, building owner Legal & General recently announced that a tower built by Henry Construction just three years ago requires extensive intrusive remedial work, leading to the eviction of residents.
The financial results of The Guinness Partnership underscore the systemic instability currently facing the affordable housing sector, where contractor insolvencies, coupled with high build costs and strict building safety requirements (which cost Guinness £37.3 million in the last year), are leading to missed completion targets and financial losses across the board.
