'Affordable' homes could be axed from Exeter development

Bosses behind the project say it is no longer viable

The prior agreement for an Exeter development to include 'affordable' homes could be axed as the developers say they have been hit by rising costs and falling property values.

Curlew Alternatives Property, who is behind the redevelopment of the former Harlequins Shopping Centre, has applied to modify its agreement with Exeter City Council. The company was previously granted permission to demolish the centre and replace it with a 383-bedroom co-living complex, on the condition that 20 per cent of these homes would be 'affordable' and aimed at key workers.

Affordable housing is defined on the UK government's website as homes that are let at least 20 per cent below local market rents. Calculating market costs factors in the property size, type and location.

Curlew now says that the market and economic climate has changed since they were given the green light in January 2022, claiming that this means that the scheme is no longer viable.

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A document prepared on the property developer's behalf and included in their application to change the agreement says: "This application was approved subject to a sc106 agreement, which regulated the provision of 20 per cent on site affordable housing, to be directed towards key workers.

"Since the determination of the application, construction costs have increased significantly, alongside falling property values and higher interest rates. The impact of these changes is that the scheme is now not viable in its original form with the provision of onsite affordable housing."

In place of the affordable housing provision, the developer is proposing that it instead makes a financial contribution to Exeter City Council. Curlew suggests that it will split this across four payments, the first to be paid upon permission being granted for the amended agreement, the second when they start constructing the flats, the third upon completion and the fourth one year later.

They say the final two payments would "reflect the financial performance of the development". This has been defined as an "overage payment" which the developer says will equate to 50 per cent of any profit above their target return of £10.1million or 13 per cent gross development value (GDV), whichever is higher.

The proposals come as the clock ticks for demolition to begin. When the scheme was given permission in January 2022, it was on the condition that work must start within three years, meaning there is now just three months until that time is up.