Michael, I agree with you. Houses are an inefficient use of urban space when demand is so great. If the principle of housing on this site was agreed then it would surely end up as flats with an underground car park.
I don't think the developer will be keen to sell 116/118 in a hurry as they provide the only practical access to the site. Under current rules the planners would be reluctant to allow vehicle access via the old track from Honor Oak Road that runs up next to Hamilton Lodge.
It is good that the site's current designation is one of urban green space but that isn't an absolute block on development. It will be interesting to see the Council's approach if an application went it.