Developer blames Brexit for making affordable homes near Ashfield too costly to build
Brexit is being blamed for making the building of affordable homes on a housing site near Kirkby unaffordable.
Langridge Homes says providing affordable homes on its 47-house scheme on Chestnut Avenue, Riddings, is unviable and would reduce its profits substantially.
It says Amber Valley Council ‘will need to accept 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 economic decline.
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 as part of a Section 106 agreement
All of this would see the area lose out on 14 affordable homes and about £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 £9.2m and axing these would give a value of £10.19m.
It says in its application, to be decided in the next few months: “It is worth noting the extraordinary increases in construction cosst 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.
“While 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 £1.34m for sorting shallow mine workings, underground drainage and retaining walls.