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Property developer says 70-home Long Sutton site ‘clearly cannot support’ affordable housing and £400,000 public services donation

A property developer wants to cancel a £400,000 donation to public services and axe affordable housing from a 70-home site.

Stinders Homes has requested South Holland District Council waive the 18 affordable homes they agreed on as part of the deal to build on land off Lime Walk in Long Sutton - stating they are in line for a deficit of more than £4.5 million on the project if forced to go ahead.

It also argue the development ‘clearly cannot support’ the Section 106 contribution of £394,003, blaming ‘abnormal additional costs’.

Plans have been submitted to South Holland District Council
Plans have been submitted to South Holland District Council

Section 106 contributions can be requested by local authorities when agreeing planning permission for major developments, to ensure adding to the local population doesn’t swamp infrastructure.

Payments regularly go to support health and education services as well as parish projects.

Paperwork submitted to SHDC states that construction of 70 units with 25% affordable housing plus Section 106 cash contributions would create a deficit of -£4,631,696, while 70 Units with no affordable housing or cash s106 contribution would lead to a deficit of -£3,425,714.

“A full policy-compliant scheme for a site of 70 units with 25% affordable housing plus S106 cash contributions of £394,003 is clearly not viable with a financial deficit (present value) of £4,631,696 once land cost, construction and other costs have been deducted from GDV (gross development value),” a viability assessment prepared by agent HA Architectural Services states.

“With no cash contributions or affordable housing, the deficit reduces to £3,425,714.

“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 assessment stated roads and drainage costs are ‘significantly above our normal benchmark figures, largely because of the need to raise levels on site to the road, provide significant surface water attenuation via both ponds and underground storage and permeable roadways to part, a pumping station for foul sewerage and a IDB (internal drainage board) drain crossing / bridge to the primary access’.

The development was given the green light by SHDC in 2022 on the proviso 25% of the development was affordable housing.

This came despite objections from Long Sutton Parish Council arguing that ‘the estate will once again be sold to a housing association rather than be affordable and available for young people, first time buyers and young families’.

In July 2023 Stinders Homes applied to cut the agreed 17 affordable homes from the 70-dwelling site, claiming it would not otherwise be able to reach its 17.5% profit margin, which was refused.

Last year this paper reported the site was predicted to make £18,932,500 in sales, although construction would cost £10,829,366.

A decision is expected by August 14.

Should developers be allowed to get out of providing infrastructure? Post a comment below…

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