Diss homes scheme grinds to a halt
Work on one of the country's largest affordable housing schemes has ground to a halt after buyers were unable to get mortgages for the development.
The Long Meadow estate between Diss and Roydon was touted as one of the biggest low-cost sustainable developments in the country when work began last year.
So far, 29 of the 114 homes have been completed. But the company behind the project yesterday said that no more could be built because the major banks were not prepared to lend money to house buyers for the 'discounted market sale' development.
Robert Pearson, one of the directors of Birmingham-based C-Zero, the firm behind the scheme, said the next phase of 39 homes on the site could not start until the development's planning conditions changed.
The company has written to the 35 people that had reserved a new house at Long Meadow and offered to refund their �250 reservation fees until the matter can be resolved.
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The development was subject to a discounted market sale agreement when planning permission was granted by South Norfolk Council.
But Mr Pearson said the major mortgage lenders, including Nationwide, the Royal Bank of Scotland, and Santander, were not lending to buyers under the arrangement that is aimed to make the housing affordable to local people.
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He added that the matter could be resolved by changing the conditions to a shared ownership or equity loan scheme. However, the matter would have to go back before a planning committee before work could resume on the greenfield site.
'We have jumped through a number of hoops with this scheme and we have come up with ideas to provide low-cost homes and it is less of a risk to lenders than open market housing. It is disappointing and frustrating that the lenders are not being flexible. We are proposing solutions that will not increase the cost that the purchasers would pay, but it may mean that the council may have a share of the equity in the houses,' he said.
He added that the delay was not a ploy to get more money from the development.
The scheme is part funded by a �3m grant from the Department of Energy and Climate Change's Low Carbon Investment Fund with a one-bedroom flat being marketed at �72,500 and a three-bedroom house at �109,000.
Yvonne Bendle, South Norfolk Council cabinet member for strategic planning and localism said: 'We are sorry to hear about the position of the lenders which has affected this affordable and sustainable homes initiative. We are talking to C-Zero and others about a potential way forward but it is very early days, and we would almost certainly expect any suggested solution would need to come before the council's planning committee.'