Developer building 36 houses in Telford allowed to withdraw money pledge to schools

Housebuilder Central and Country argued that its plans to build 36 houses in Horsehay were no longer viable under the previously agreed terms due to inflation.

The developer applied to have its Section 106 financial agreement reduced from £196,000 down to £23,000 towards highways improvements – removing the contribution towards education.

The applicant also requested to reduce the number of affordable houses from nine to seven.

Nick Laight speaking on behalf of Central and Country at Telford & Wrekin Council’s planning committee said the variation request was due to an "unexpected change in market conditions" since the company bought the land on Pool Hill Road and Doseley Road.

He said that the site was bought in 2021 for £1.125million from Telford & Wrekin Council and planning permission included a Section 106 agreement with a 25 per cent element of affordable housing (nine homes).

“Since purchase we have had Brexit, the [Covid-19] pandemic and the Ukraine war which have all driven up bill costs significantly,” said Mr Laight.

“Sales values have overall fallen due to the rising interest rates and mortgage availability. Within two years our appraisal assumptions have deteriorated significantly which has impacted the viability of this scheme and its ability to deliver policy compliant levels of affordable housing and Section 106 contributions of £196,000.

“Our problem is summarised in one word, inflation. The situation is actually worse than what is referred to in the viability assessment.

“The council’s independent assessment confirms that despite grant funding being available the scheme is deemed unviable and unable to deliver contributions in full, given the expected developers' return is not achieved.

“If approved we can press the button on a start date this summer. Without your support we won’t be able to commence the work.”

Councillor Giles Luter said he ‘appreciated’ the financial strain businesses were under but said that affordable social housing is a priority of Telford & Wrekin Council.

“I don’t know whether I can support the reduction of the social housing,“ said Councillor Luter. “I’m also very disappointed to see such a dramatic reduction in Section 106 money.”

Councillor Luter suggested that the application was deferred and a site visit was carried out to see what amenities are available and the impact the development would have without the extra Section 106 money.

Councillor Nigel Dugmore highlighted that children ‘would still need to be educated’ despite the developer withdrawing its financial agreement to provide money towards education.

Andy Gittins, planning officer, said that national planning policy framework says that if an applicant demonstrates that a scheme is not viable then ‘that has to be accepted’.

“Whilst they’re not providing money towards education they are providing other benefits to the borough,” said Mr Gittins. “The people who live in the houses will be contributing to the economics of the borough.”

Valerie Hulme, Telford & Wrekin development manager, said that there were grants that the education authority could apply for to deal with the increase of children living on the development.

Councillor Peter Scott argued: “Every excuse was given there as to why it’s no longer viable after two years. The problem is our hands are tied on this. If we were to refuse it we will lose any appeal.

“I do wish developers would come forward with a more viable plan to start with so we didn’t have to keep addressing this.”

Councillors voted all in favour of the approving the variation.