Brexit blamed for making affordable homes on a Derbyshire housing site ‘unviable’

Brexit is being blamed for making the building of affordable homes on a Derbyshire housing site ‘unviable’.

By Eddie Bisknell
Monday, 6th September 2021, 4:28 pm

Langridge Homes says providing affordable homes on its 47-house scheme in Chestnut Drive, Riddings, is not viable and would reduce its profits substantially.

It says Amber Valley Borough Council “will need to accept that some sites may not be capable of delivering affordable housing and infrastructure contributions in the current economic climate”.

The developer blames Brexit as the primary cause for the decline in economic climate.

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The developer blames Brexit as the primary cause for the decline in economic climate.

This is the third time this year that a developer in Amber Valley has applied to drop its affordable housing promises – years after being given permission to build.

Langridge Homes also says it cannot afford to give money to offset the impact of its scheme by providing hundreds of thousands of pounds for schools, open space and transport.

All of this would see the area lose out on 14 affordable homes and around £350,000 for schools, open space, a travel plan and bus stops.

It says including affordable homes and money for infrastructure would see it lose nearly £2.3 million and that scrapping these would still see it lose £576,000 – which it feels it can make up through internal borrowing.

The firm claims a scheme involving affordable homes and infrastructure payments would be valued at £9.2 million and axing these would give a value of £10.19 million.

It says said in its application, which will be decided in the next few months: “It is worth noting the extraordinary increases in construction cost that have occurred since the original S106 agreement was entered into, primarily as a result of Brexit.

“The 24 per cent post-Brexit increase (for build costs) in 2018 resulting from huge increases in imported material costs and scarcity of labour as European construction workers started to disappear saw a cost increase that is unprecedented in the last 30 years.

“Whilst there has been some house price growth in the last five years – it is nowhere near the 35 per cent increase in build cost in the same period.”

It also says “abnormal” costs linked to the Chestnut Drive site have driven the project away from being financially viable, with sums totalling £1.34 million for sorting shallow mine workings, underground drainage and retaining walls.

This latest application comes two months after Langridge Homes was successful – at the second time of asking – in dropping affordable houses from its Church Farm scheme in Peasehill Road, Ripley.

It had applied to drop all 28 affordable homes from the final phase of the 349-home scheme, with the borough council agreeing to drop 20 and keep eight, after lengthy discussions and a split July planning committee vote.

In late June, Wheeldon Brothers Ltd applied to the borough council to drop its pledge to build 27 affordable homes at Hall Road in Langley Mill, a year after it had won approval.

It also applied to ditch agreements for half a million pounds worth of total commitments to healthcare and education to offset the scheme.

This was to ensure the developer makes a 20 per cent profit on the scheme of £3.23 million, from sales of £16.13 million.