Developer bids to axe social housing from Kirkcaldy project as costs spiral

The developers behind a plan to convert a former weaving factory into flats are seeking to back out of a requirement to provide affordable housing as part of the deal - because project costs have spiralled.

By Jon Brady, Local Democracy Reporting Service
Monday, 8th February 2021, 3:33 pm
Updated Monday, 8th February 2021, 3:35 pm

Dalgety Bay firm, Mackay & Stenhouse, received planning consent to create 32 flats and a semi-detached house on the site of Forth House on Kirkcaldy's Abbotshall Road in August last year.

As part of the deal, Fife Council required the housebuilders to ensure five of the proposed dwellings in the ex-council offices were affordable - either by way of mid-market rent or low-cost ownership - but would not provide any funding towards this, nor would any social landlord such as a housing association.

While they initially put up resistance, Mackay & Stenhouse relented and entered into a Section 75 agreement with Fife Council, making the affordable homes requirement legally binding.

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Architect's impression of new housing development approved for former council buildings at Forth House, Kirkcaldy

However, in a new application to the local authority, the firm is seeking to instead pay Fife Council an affordable housing contribution of just under £32,000.

In total, the five flats were given an estimated market value of over £500,000 - more than 15 times the payment being offered.

Previous analysis suggests that Mackay & Stenhouse would need to sell the discounted flats at an average of 20% below their market value to have them qualify as "affordable" - and rising project costs made this "no longer viable", according to an email between the firm and Fife Council planners.

In the exchange, the council said the housing department would be willing to accept the £31,950 payment in lieu of affordable homes because of the difficulties associated with preparing the building for construction.

However, the request must be approved by planning officers before it can be put in place.

A decision is expected before the end of March.

The new homes mark the continued development of the area with a new gym set now open on the site of former Norman Rollo car showroom, adjacent to it.

Forth House building dates back to 1860 and was a former linen weaving factory, built by the Jeffrey family.

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