Builder looks to remove affordable housing and £117,712 contributions for Gosberton development

A builder is looking to remove its affordable homes and financial contributions from a scheme, claiming it is on course to lose more than a million pounds on the plan.

Emerald Homes was granted planning permission last year to build 20 homes in Boston Road, Gosberton, with requirements to provide five affordable units along with £117,712 financial contributions.

But the developer has now asked South Holland District Council to remove the section 106 agreements (s106) from its original planning permission as it is set to make a £1,427,290 deficit on the project.

Documents submitted with the application argues that the cost of developing the land is high with the total benchmark land value of the site is £558,250 - but the calculations include a 17.5% profit level on some homes.

The viability assessment states: “A full policy-compliant scheme for a site of 20 units with 25% affordable housing plus S106 cash contributions of £117,712 is clearly not viable with a financial deficit (present value) of £1,427,290, once land cost, construction and other costs have been deducted from gross development value.

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“With no cash contributions or affordable housing, the deficit reduces to £1,121,831.

“As such, the site clearly cannot support contributions on the basis of the provision of affordable housing and S106 cash contributions from South Holland District Council.

“The viability of the site is challenging, with significant levels of abnormal and additional costs, even with no contributions and will only be deliverable if the developer is prepared to accept a reduced level of return.”

The documents states that the houses would be valued between £150,000 and £850,000 and that the land values calculated of between £2,255 per m2 and £2,813 per m2.

It also goes onto state that the basic build cost is £1,389 per m2 with £3,000 per plot for patio, turf and fencing.

The developer also argues that an ‘enhanced area of open space’ is needed because of ‘flood risk constraints’.

The assessment also adds: “A profit level of 17.5% has been adopted for market units and 6% for affordable housing, which is considered to be the minimum level of profit a developer would accept to undertake this scheme.

It adds: “An EUV for the land of £25,000 per gross hectare has been adopted which is Grade 1 agricultural value. To this, a premium of £250,000 per gross hectare has been added for the proposed development land, a basis that has been accepted elsewhere in South Holland and is deemed a sufficient sum to bring the land forward for development. This gives an overall BLV of £558,250 for the 2.03 ha site.”