6
Councillor Reeves moved to the public gallery.
The Committee received report ES/2500 of the Head of Planning and Building Control which related to planning application DC/24/1454/VOC. The application sought to vary condition 2 of planning permission DC/22/0991/FUL for the erection of 50 dwellings and associated landscaping and infrastructure. The Principal Planner gave a presentation and ran through the history of the application. In April 2024 an application was submitted regarding a variation to the affordable housing element. Rapidly rising construction costs and static/falling house prices had led to questions about the viability. The amendment would enable the Affordable Housing Layout plan (AHL.01.Rev B) in the approved list of drawings to be changed following an update to the viability of the scheme. Should a resolution to grant planning permission be accepted, a Deed of Variation to the s106 Agreement would be required to reflect the revised Affordable Housing position.
The Principal Planner explained that the Applicant’s justification for the amendments was based on a change in circumstances relating to the viability of the approved scheme, construction costs, static and decreasing house prices, Building Regulations coupled with a lack of interest, or unviable offers, from Registered Providers. The s106 clause states that “If the Council is satisfied that demand from Registered Providers has not been forthcoming for Reasonable Consideration the Council will enter into written negotiations with the Owner to seek an agreed way forward that does not disadvantage the Owner whilst maximising the provision of Affordable Housing.” After many negotiations they reached a settlement which was presented to Planning South in June 2025 proposing the purchase of four houses by East Suffolk’s Housing Team. The decision was deferred to allow further negotiations and after further scrutiny of the viability assessment a revised offer of purchasing six houses by the Housing Team was now being proposed. The abnormal costs had been reduced by £318k and the price £/sqft had reduced from £368 to £355.
The recommendation was to grant planning permission to vary condition 2 pursuant DC/22/0991/FUL, subject to a s106 Deed of Variation to amend the provision of Affordable Housing to 6 on-site units (12%).
The Chair invited questions to the planning officers.
Councillor Hedgley asked if six was as high as they could go. The Principal Planner explained that the original offer was for ESC to buy four dwellings or a commuted sum from the developer, but Members voted to defer to see if any more affordable housing could be squeezed out of the developer. As a result they are willing to sell six units to East Suffolk Housing.
Councillor Ninnmey was perturbed by the whole thing. 50 houses will be built and 17 would have been affordable but now we are letting them reduce the offering significantly which increases their profit margin by 40%. He asked if this was correct or is he was misreading it and they wouldn’t be going back to the landowner asking for a reduction in the purchase price and that it was just the affordable housing that was taking the hit.
The Principal Planner said no and explained that the Housing Team made an offer for four but the decision was deferred to see if they could purchase more. They then revised their offer to six which was retested for viability against updated costs. It is technically unviable for the developer and they will lose out by £92k but they are happy to agree to this to get the application over the line.
Councillor Hedgley asked what the result would be if they refused the application. The Principal Planner explained that the viability had been tested by an independent consultant. If it went to appeal there was a chance that the council would lose even more affordable housing.
Councillor Ashton asked what the viability profit margin was as a percentage. The Principal Planner was unsure but a loss of £92k was significant. The Head of Planning and Building Control explained that the national position was 15-20% profit and in this instance it was 17.5%. This had been tested in case law and appeals.
Councillor Ashton asked that this was the viability of just this site which was confirmed by the Head of Planning and Building Control. Councillor Ashton asked if he was correct in thinking that if East Suffolk purchased more properties the viability got worse. The Principal Planner confirmed he was correct.
The Chair invited Councillor Beavan to speak as Objector. Councillor Beavan quoted the report saying that construction costs had risen and sales prices remained static and there were additional costs related to Building Regulations. He said compliance with Building Regulations was not an abnormal cost. The Office of National Statistics reports that the average house price in East Suffolk was £300k in March 2023 increasing to £305k in March 2024 when they claimed the fall in prices. The BCIS index showed that costs were already increasing in 2023 when the developers got planning permission. He did not feel that their claims stacked up. He said the gross development of the site was £50m and East Suffolk would be guaranteeing them 20% profit of £3m, minus £92k, which was a substantial profit. The developer agreed to 17 affordable homes and he asked why homeless families should suffer when the developer paid 12x what the land was worth. He finished by saying that he would like another three months to find the money to buy another six homes and asked the Committee to stand up for homeless families as we need homes that people can afford to live in.
The Chair invited questions to Councillor Beavan.
Councillor Ninnmey said due to Covid very few house transactions took place at that time which then led to a spike in prices and sales after the pandemic. However now the demand had softened in the housing market. He asked if there was a misrepresentation in the figures presented in the report.
Councillor Beavan said prices were static and not keeping up with inflation which was a good thing. Margins were being squeezed in building but why should affordable housing be the thing that suffered. It should be the price of the land. There was fat there to cut and that should be used to supply affordable housing. The hope value should be disregarded and then the development does become viable.
Councillor Byatt asked about the three month deferral and if they could find funding with that cushion. Councillor McCallum raised a point of order that Councillor Beavan was here as an objector and not cabinet member. The Chair dismissed the question.
Councillor Hedgley appreciates the passion but if we turned it down and it went to appeal and we lost and had to pay, would it be worth it. Councillor Beavan said it was vital we won this argument and with the requirement to build 1,700 houses under the new regulations we want as many of those to be as affordable as possible.
The Planning Manager acknowledged the emotion and cynicism around this application. He reassured Members that the independent consultant, BNP Paribas, often push back and they were rigorous in their testing. The planners don’t just accept the findings at face value. He wanted to give members confidence that they instructed an independent assessment and there should be no perception that there were incorrect facts. A robust process has been followed.
Councillor Ashton asked if the changes in house prices were reflected in the BNP Paribas viability assessment as that is material to whether we should accept the assessment or not. The Planning Manager said the review reflected the current situation which is why there was a reduction in the abnormal costs. The Principal Planner explained that the sale price per sqft had reduced which cancelled out the benefit of the reduction in the abnormal costs, which was why there was still a deficit.
Councillor Reeves was invited to speak as ward member. He felt strongly about the need for more affordable homes in the ward. He expressed concern that all the green land was being built on and the chance to have affordable homes was very limited. To lose this many affordable homes here was a disaster. At the previous meeting he asked that further possibilities be explored such as funding through bonds and Armed Forces Capital Fund but he was not sure if anything had been done in this regard. He was unsure if the developer had approached such bodies about potential interest. He pointed out that it was not good that the developer had not turned up to the meeting again. The Council needed to send a message to developers that if they want to work with councils they need to sit down and talk to us. He asked for the decision to be deferred again, citing lack of developer attendance.
Councillor Ninnmey asked about approaching another provider and if this would mean an immediate retrofit. Councillor Reeves was not aware of the spec they were working to but as Councillor Beavan said, working to Building Regulations should be a standard cost.
The Head of Planning and Building Control summed up. He explained that the key point was that there had been an exhaustive process of review. He said it gave planners no satisfaction to deal with the loss of affordable housing but they had a s106 that had mechanisms to address issues like this. He pointed out it was a national situation that there is little take up from Registered Providers for affordable homes. He said they must accept the position that has been arrived at and work with what was on the table. The application had been independently reviewed and they had worked with the consultant over several years. It was a very objective position reached through national guidance and policies. He appreciated the strong feelings and regretted seeing this situation. He was satisfied with the recommendation in the report but he does hear the local concerns and they are working hard to achieve affordable homes. He reminded Members that they had to reach a position.
The Chair invited Members to debate. Councillor Hedgley didn’t doubt that officers had made every effort to get affordable housing on this site. He didn’t believe the developers were being allowed to get away with it. His concern was that if the Committee refused the application how much longer would it go on for. The applicant would take it to appeal and if we lost we pay for it. He recommended biting the bullet and that this was as far as we can go on this.
Councillor McCallum concurred with Councillor Hedgley. She was on the list for social housing but realises we won’t get everything we want. She didn’t think it was a bad offer. It was a sad situation but markets and values change. She couldn’t vote against this and couldn’t see us winning at appeal. Despite her own necessity for somewhere to live she would vote in favour.
Councillor Ninnmey was disturbed and surprised that the developer was not here in person. He would like to know which five Registered Providers had been approached and why they weren’t interested. He acknowledged that housing rental prices were increasing dramatically whilst house sales prices were declining but this would reverse. He wished to vote in favour of a further deferment in order to get a better deal.
Councillor Ashton said fundamentally the market was the problem and wondered if it was worth challenging viability rather than improving efficiencies. He was very concerned about the principle of challenging viability. He had taken on board what had been said and acknowledged the lack of demand from registered providers but the elephant in the room was the land value, as the developer paid over the odds. The developers should be dealing with the landowners. He accepted the points raised by Councillors McCallum and Hedgley but there are times to allow the appeal process to go through. He felt this was a chance to voice our concerns about viability and was minded to refuse and defend at appeal as that would test it. He was not in favour of deferring again.
Councillor Byatt felt it was a sword of Damocles situation – damned if you do and damned if you don’t. Deferring again could see an even greater increase in costs and if delayed and it went to appeal it would delay any affordable housing. He noted that the developer was willing to take a hit against their profits although it would have been nice to have the developer here today. He was minded to approve as this project needed to get started.
Councillor Fisher agreed with Councillor Byatt. He didn’t like to support something that provided such few affordable houses but thought this was the best deal we would get.
Councillor Ninnmey asked for clarity that Councillor Ashton meant there wasn’t demand from housing providers rather than for social housing. Councillor Ashton confirmed he meant it was a lack of interest from housing providers.
On the proposal of Councillor McCallum, seconded by Councillor Hedgley it was
RESOLVED
Resolve to grant planning permission to vary condition 2 pursuant DC/22/0991/FUL, subject to a S106 Deed of Variation to amend the provision of Affordable Housing to 6no. on-site units.
Conditions:
1. Condition 2 to be updated to replace approved Site Layout (SL.01.F) with revised Site Layout (SL.01.J) and removal of Affordable Housing Layout (AHL.01.B):
The development hereby permitted shall be completed in all respects strictly in accordance with:
Drwg. No. SL.01.1 C received 04.09.2025;
AHL.01.1 C received 04.09.2025;
Drwg. No. LP 01 A received 10.03.2022;
Drwg. Nos., SL.01F, HLP.01 F and STORAGE,02.pe B received 01.09.2022;
and the following plans received 01.08.2022:
AHL.01 B, BDLM.01 B, RCP.01 B, PP.01 B, PM-01 B , POS.01 B, FB-A.e B, FB-A.P1 B, FB-A.P2 B, FB-A.P3 B, HT-2B4P.e B, HT-2B4P.p B, HT-2B4P-MID.e B, HT-2B4P-MID.p B, HT-3B5P.e1 B, HT_3B5P.p B, HT-3B5P-MID.pe A, HT.766.e B, HT.766M4(2).p B, HT.966-M4(2).p B, HT.966-2.e B, HT.966.p B, HT.966-M4(2)-2e B, HT.1136.e B, HT.1136.p B, HT-1102.e B, HT-1102 M4 (2).p B, HT.1102.p B, HT.1102M4(2).e B, HT-1319.e B, HT-1319.p B, HT-1319-B.e B, HT-1319-B.p B, HT-1424.e B, HT-1424.p B, P.9-11.e A, P.9-11.p A, STORAGE.01.pe B, GAR.01.pe B, GAR.02.pe B, GAR.03.pe A, MAT22825-11 sheet 1 B, MAT22825-11 sheet 2 B, MAT22825-11 sheet 3 B, MAT22825 man A, MAT22825spec (received 10.03.2022), MAT22825-03 A and MAT22825aia_ams A for which permission is hereby granted or which are subsequently submitted to and approved by the Local Planning Authority and in compliance with any conditions imposed by the Local Planning Authority.
Reason: For the avoidance of doubt as to what has been considered and approved.
2. The other conditions shall be as per the parent planning permission with minor amendments to the wording as appropriate, in order to reflect the changes to condition 2.