A housing estate is set to be built in a river valley, after a planning inspector overturned a council's decision to reject the development.

The 62 homes will be built off Townhouse Road in Costessey, signalling a blow for hundreds of people who campaigned against the development and South Norfolk Council, which rejected the initial application.

Following a hearing in July, planning inspector Christina Downes ruled on Friday that a lack of a five-year land supply for housing in the area covered by the Greater Norwich Development Partnership (GNDP) – Norwich, Broadland and South Norfolk – meant the application should not have been dismissed.

Applicants Martin Green and Norwich Consolidated Charities are now expected to find a developer for the land.

Councillor Tim East, who opposed the plans, said: 'So much for localism and the community involvement in local plan making – is this just empty government rhetoric?'

But he described the decision as a 'pyrrhic victory' for campaigners, as the inspector agreed that the development would have an impact on the landscape of the Tud river valley.

Mrs Downes stated in the report: 'The Tud valley landscape is highly valued by the local community and the landscape and visual impacts would be significant and harmful.'

But she ruled: 'It seems inevitable that in order to address housing shortfalls greenfield land outside of existing settlement boundaries will need to used.

'I have come to the conclusion that the proposal does, on balance, represent sustainable development.

'The adverse impacts of granting planning permission in this case would not significantly and demonstrably outweigh the benefits that would be gained.'

Mr East added: 'It is quite a perverse report which agrees with much of our contention that the refusal should be upheld, but in the end we were always going to be up against fighting off the five-year land supply argument.'

The leader of South Norfolk Council, John Fuller, described the decision as 'frustrating'. He said: 'Under-deliverance in neighbouring authorities has aggravated the situation in South Norfolk.

'We have been keeping up our housing supply locally.'

Mr Fuller added that the decision was against the 'spirit of localism'.

'The five-year land supply has become a racket that has prevented houses being built,' he said. 'Developers are getting planning permission and then claiming they cannot build them.

'How, when there are 10,000 homes waiting to be built, can there not be a five-year land supply?'

As reported in January, the GNDP area has planning permission for 9,870 homes. Yesterday, the council launched its final round of consultation on its local plan, which earmarks land for development, and the Townhouse Road site was not included.