Housebuilder blocked from axing affordable housing contribution

Plans by a housebuilder to scrap a previously promised affordable housing contribution for a planned 224-home development have been rejected.

Persimmon Homes sought to remove a £573,720 affordable housing contribution attached to plans for land in Lesmahagow in South Lanarkshire.

The company argued the development had become financially unviable due to "significant abnormal costs" associated with the site, but this was knocked back by South Lanarkshire Council.

However the housebuilder told BBC Scotland News it would not abandon the development, despite the cost increase.

The wider development was approved by the council in August 2024, subject to a legal agreement requiring contributions towards affordable housing, education and community facilities.

Persimmon subsequently applied to have the affordable housing element removed, while retaining its commitments to contribute £575,008 towards education and £224,000 towards community facilities.

The housebuilder cited significant abnormal costs, such as earthworks, drainage, roads, foundations, retaining structures and service diversions.

Persimmon also stated it has been faced with an unexpected £775,000 cost to divert BT Openreach fibre optic cables, following the approval of a new roundabout providing access to the development.

The company previously suggested changing the proposed roundabout to a signalised junction in an attempt to avoid the cost, but this was rejected by the council's road officers.

A viability assessment prepared by Savills for Persimmon put the site's abnormal development costs at more than £6.3m but council officers disputed the company's justification for removing the affordable housing contribution.

Councillor Ross Clark also questioned the future of the development at a planning committee meeting.

He said: "Just a question to clarify, the report talks about what the applicant sees as unviability, so what have they actually said will happen to the development if this application is refused?

"And is the council standing firm on the affordable housing element?"

Planning officials stated that it was up to the applicant to decide for themselves and there are a number of options available to the developer.

A Persimmon Homes spokesperson told BBC Scotland News: "The additional cost of diverting fibre cables, which was unknown at the time of the planning application, has placed significant additional pressure on the viability of our Lesmahagow site.

"We are disappointed that the council did not take this unforeseen cost into account.

"Having previously delivered a number of developments across South Lanarkshire, we are committed to maintaining our presence in the area, supporting local jobs and delivering much-needed new homes for local people.

"We have therefore taken the decision to proceed with the development, despite the additional cost pressures."

Planning officers said that costs such as retaining walls, earthworks and foundations were common risks associated with developments of this nature and should have been considered as part of the developer's due diligence before purchasing the land.

Under South Lanarkshire's local planning policy, developments of 20 homes or more are generally expected to contribute towards affordable housing, with the policy allowing for up to 25% of a site's capacity to be provided as affordable housing.

Planning officers concluded Persimmon had failed to provide sufficient justification for removing the contribution.

Story by Local Democracy Reporting Service reporter Shannon Milmine.