£300K funding for Tower Hamlets blocks deal in 2026

Key Points

• Tower Hamlets council granted airspace lease on blocks
• Under £300,000 due for five housing blocks
• Developer company later struck off Companies House register
• Questions raised over valuation, due diligence and oversight
• Local residents and campaigners demand full transparency

Tower Hamlets (Extra London News) March 16, 2026 – Tower Hamlets Council is set to receive less than £300,000 for five council housing blocks after their rooftop “airspace” was transferred to a developer that has since been struck off the companies register, prompting renewed scrutiny of how local authorities manage public assets amid the continuing housing and funding crisis in England.

How did Tower Hamlets’ airspace deal with a struck‑off developer emerge?

The story centres on a deal in which Tower Hamlets council agreed to grant airspace rights effectively the right to build new homes above existing council blocks to a private developer for a figure reported to be under £300,000 for five separate buildings. As reported by an unnamed housing correspondent at a London daily, the arrangement involved long leases over the roof spaces, with the expectation that the developer would secure planning permission, raise finance and add new flats on top of the existing social housing blocks.

According to coverage in a leading national newspaper’s local government section, the developer company involved in the transaction was later struck off the register at Companies House, meaning it was formally dissolved and ceased to exist as a legal entity. The same reporting explained that when a company is struck off without its affairs being fully wound up, any remaining property or rights it holds can, in principle, pass to the Crown as bona vacantia, unless steps are taken to restore the company or otherwise regularise ownership.

As described by the local government editor of a prominent broadsheet, the revelation that Tower Hamlets will receive under £300,000 for airspace covering five entire blocks while the named developer is no longer trading has fuelled concern among residents, housing campaigners and opposition councillors about whether the council properly valued the public land and implemented sufficient safeguards before signing the agreement.

Who was the struck‑off airspace developer, and what does being struck off mean?

As reported by an investigations reporter for a Sunday newspaper, the company that was originally granted the airspace rights over the five Tower Hamlets blocks was a relatively small specialist airspace development firm, incorporated only a few years before the deal. That journalist’s piece stated that the firm’s directors had previously been involved in other property ventures, some of which attracted complaints from leaseholders about unfinished works and service‑charge disputes, although no findings of wrongdoing were made by regulators.

The same investigation recounted that, according to public filings, the company later failed to submit accounts and mandatory paperwork to Companies House, prompting the registrar to begin compulsory strike‑off proceedings. As described by that reporter, strike‑off notices were published in the official record, and after no successful objection, the company was dissolved and removed from the register.

In a separate explainer, a business correspondent at a financial newspaper clarified that when a company is struck off, it loses its legal personality: it cannot hold assets, enter contracts or participate in legal actions. The correspondent noted that any property or interests that have not been transferred before dissolution may be deemed ownerless and can revert to the Crown, unless application is made to restore the company to the register through the courts or by administrative process. 

What has Tower Hamlets council said in response to concerns?

As reported by the local democracy reporter who first covered the deal, Tower Hamlets council has defended its position by stating that the transaction complied with legal requirements and that professional advice was obtained at the time. According to that report, a council spokesperson said the authority “acted in the best interests of residents” and pointed to national funding cuts faced by local government over the last decade, which have forced councils to look for alternative revenue sources.

In an additional statement cited by a public affairs correspondent at a national broadcaster, the council stressed that no residents had yet been displaced and that any future construction on the blocks would be subject to full planning processes, including consultation with tenants and leaseholders. The broadcaster reported the spokesperson emphasising that “any development proposals will have to meet stringent safety and design standards” and that the council “remains committed to protecting the rights of existing residents”. Again, the thrust of the comments is summarised rather than reproduced verbatim.

A separate article by a commentator focusing on local government governance noted that the council has not publicly disclosed the full heads of terms, citing commercial confidentiality, but has indicated it will co‑operate with any external audit or review. That commentator wrote that Tower Hamlets has said it will “learn lessons” from the case and keep its asset disposal and partnership arrangements under review to ensure best value.

What legal and financial issues does the struck‑off status create?

A legal analysis by a public law specialist writing in a legal affairs magazine explained that the key legal question is who now holds the airspace rights originally granted to the developer for the five Tower Hamlets blocks. The lawyer wrote that, if the leases were completed and registered before the company was struck off, they would normally remain valid interests in land, even though the company has ceased to exist, potentially falling into the bona vacantia regime.

The same article stated that in such circumstances, the Crown (acting through the Treasury Solicitor or the Bona Vacantia Division, depending on jurisdiction) may have the ability to disclaim the property, after which the interest can escheat and ultimately revert to the freeholder or a superior landlord. The piece added that an application could also, in principle, be made by former directors, creditors or other interested parties to restore the company to the register, which would revive its legal personality and its holdings.

A finance reporter at a national broadcaster, summarising expert commentary, highlighted that the struck‑off status creates uncertainty for potential funders and purchasers of any future rooftop development, because lenders typically require clear, enforceable title to the property or rights they are financing.

How does this case fit into the broader trend of airspace development in London?

As reported by a housing markets specialist at a major broadsheet, airspace development has become increasingly popular in London since the mid‑2010s, partly due to pressure to increase housing supply without taking up new ground‑level land. The specialist noted that new permitted development rules and targeted funding schemes were designed to encourage building upwards, including on top of existing residential blocks.

An urban planning commentator writing in a policy think‑tank’s publication described how several London boroughs have entered partnerships with private firms to exploit rooftop sites, sometimes generating new council homes as well as private flats. However, that commentator also documented a series of disputes, ranging from structural safety worries after the Grenfell Tower fire to complaints about loss of light, privacy and amenity.

A separate feature in a Sunday newspaper’s property supplement recounted both successful and problematic airspace schemes across the capital, including examples in which rooftop extensions financed much‑needed refurbishment of ageing council blocks. Nonetheless, the article concluded that “the balance of power and information in these deals usually lies with private developers and their advisers”.

Are there implications for governance, scrutiny and best value in 2026?

As noted by a local government correspondent at a quality daily, Tower Hamlets’ under‑£300,000 airspace receipt has triggered calls for the council’s scrutiny committee and external auditors to examine whether best‑value duties under local government legislation were fully met.

The correspondent reported that opposition councillors have already signalled their intention to request detailed papers and, if necessary, call senior officers and portfolio‑holders to give evidence in public.

Commentary in a financial newspaper’s public sector section also pointed out that, in 2026, councils across England are facing acute financial pressure, with some authorities issuing or considering so‑called Section 114 notices that limit non‑essential spending. Against that backdrop, the piece observed, councils may feel under pressure to monetise any available asset, even where the price is relatively low, because small capital receipts can still help balance short‑term budgets.

What might happen next for the five Tower Hamlets blocks?

A planning and regeneration reporter at a London news outlet outlined several potential scenarios for the five affected blocks. One possibility, the reporter explained, is that steps could be taken to restore the struck‑off developer to the register, allowing the company or its successors to move forward with development, subject to planning permission and finance.

Another scenario could see the relevant leases or rights disclaimed, potentially leading to the interests reverting to the council, which might then choose to re‑market the airspace, pursue development itself, or leave the roofs untouched.

As further reported in that piece, residents’ groups are likely to continue pressing for assurances on building safety, disruption and consultation, regardless of which path is chosen. Some tenants quoted or paraphrased in the coverage expressed concern about the prospect of construction works above their homes, citing worries about noise, dust and the impact on vulnerable residents, even as others acknowledged that new homes are urgently needed in the borough.