A Harrogate-based housing developer has warned that a 60-home scheme near Ripon is “undeliverable” because of the terms being imposed.
V & A Homes has planning permission to develop a 6.8-acre site in Back Lane, Sharow (pictured).
But the section 106 agreement agreed between the developer and the local authority setting out planning obligations has proved to be a stumbling block.
The agreement requires 40 percent of the homes to be classed as affordable housing.
Besides this, the section 106 agreement requires V & A Homes to make a number of other financial contributions ranging from supporting education provision and traffic calming measures to funding improvements for Sharow Village Hall.
The site in Sharow earmarked for 60 homes.
Working on behalf of V & A Homes, consultants Continuum have submitted a financial viability assessment to North Yorkshire Council planners, after conducting detailed appraisals relating to the scheme.
The report, which has been uploaded on the North Yorkshire Council planning portal, said:
“Continuum conclude that the scheme cannot support any section 106 contributions (including affordable housing) as required by the current section 106 agreement and the section 106 agreement should be modified in order to allow for the scheme to be deliverable.”
The consultants added:
“The appraisals show that the proposed scheme makes a significant loss if the section 106 agreement’s contributions were not modified. Based on this, if contributions are not reduced, the scheme would be undeliverable.”
The report listed other factors, including increased developer finance rates, rising interest rates, a slowing residential market and ‘abnormal’ costs on site, which have impacted on the viability of the development.
The developer is now seeking to modify the terms of the section 106 agreement.
The report said:
“At the time the application was being considered, our client highlighted that there were issues with the viability of the scheme due to cost inflation and abnormal costs.
“Harrogate council however informed that our client could undertake a viability assessment after receiving a planning consent instead of delaying the granting of a planning consent.
“Subsequently, since the granting of the planning consent, our client has requested that they be able to run a viability case to reduce the section 106 contributions through a section 106 modification. This has been accepted by North Yorkshire Council and this financial viability assessment forms the basis of the evidence behind the modification of the section 106 contributions.”
In November 2022, a planning application for the Sharow development was submitted to Harrogate Borough Council as a joint proposal by V&A and non-profit developer Broadacres Housing Association Limited. The application was approved by North Yorkshire Council planners in April.
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