The developer behind plans for eight new homes in Heathfield says if it has to pay the council half a million pounds to make up for none of them being affordable, the whole scheme will have to be scrapped.
Clifton Homes Ltd was given outline permission on appeal to build seven houses and a bungalow on Sandy Cross Lane in March 2023, after Wealden District Council refused it.
Planning inspector Jane Smith agreed that because the scheme was self-build – i.e. the plots would be sold to buyers who would build the homes themselves – it would be unworkable to insist that 35% of them should be affordable, as per council policy.
Instead, Clifton Homes should pay the council a contribution so it could build affordable homes on a different site.
But it is now arguing that paying this contribution – as part of a section 106 agreement – would make the whole scheme financially unviable.
A lengthy viability statement, written by S106 Management, says even without a contribution, they estimate the scheme will only make a 2.39% profit – much less than the 17.5% at which council policy says a contribution is due.
The figures are based on a valuation of completed houses at £5.63 million and the estimated cost of building them, including construction, developer’s return and the value of the land.
It says: “The valuation has been reached following extensive market research, consideration of comparable characteristics in recent transactions, new build and external amenity premiums and advice from local agents and therefore should be considered robust.
“The figures represent the very top end of what can be achieved in today’s market and considering current trends should be considered optimistic.
It adds: “Construction costs in 2021-24 have been turbulent, with significant variations occurring due to supply/ demand imbalances post-Covid, increased building regulations and energy crises.”
In a covering letter, Clifton Homes’ agent Grassroots Planning said: “Since the appeal was granted, the applicant has been marketing the site for self or custom build, on both a whole site and per plot basis.
“During this period very limited interest has been received with most parties who have considered the site citing the affordable housing contribution as being the reason why they could not proceed.
“In light of these concerns the application has sought advice from viability specialists (S106 Management) to give their view on whether the affordable housing contribution was the reason that the site was unavailable and no offers were being made.
“S106 Management’s initial advice was that the development seemed to be unviable on the basis of the large £500k+ affordable housing contribution that had been applied so they were instructed to examine this in detail.”
A similar scheme by the same developer on a neighbouring plot was also refused last year. No appeal has been lodged against that decision.
