Frustration as affordable housing dropped from 53-home development

A housing developer has dropped plans for affordable homes in its new estate in South Ayrshire, with no social housing operator willing to work with them.

The developer, Milestone, will not be asked to provide additional contributions to make up for the lack of social housing, arguing that the money spent on pursuing the arrangement outweighed what they would be expected to pay.

Planning permission had been given to 53 homes at Manse Road in Coylton with one of the conditions requiring 13 of the houses to be set aside for affordable housing.

Councillors were told that the developers had spent significant amount on the affordable housing element of the estate, but had failed to secure any social landlords to take them on despite repeated attempts over the last three years.

Councillors raised concerns about the failure, but agreed to remove the condition requiring on-site affordable housing from the scheme, which sits on the eastern edge of the village.

The decision means all 53 properties are now expected to be for private sale.

The original planning consent was granted in 2022.

According to the planning report, the developer first worked with Ayrshire Housing, a registered social landlord, agreeing terms, design, housing mix and costs, and helping prepare a Scottish Government funding bid.

However, Ayrshire Housing later withdrew in October 2023 after deciding costs were too high.

The developer then entered detailed discussions with the council’s own Housing Strategy and Regeneration Service in late 2023, with a new mix of homes – including wheelchair-accessible provision.

The applicant said that the Council’s Housing Strategy and Regeneration Service considered that the costs were feasible and told them to develop proposals, which were submitted to South Ayrshire Council in May this year.

However, the report states: “The applicant finally states that in June 2025, following a lack of progress with tender approval and land acquisition, the council informed the applicant that they would no longer be pursuing the project due to a procurement issue.”

The developer also approached other registered social landlords – Cunningham Housing Association, Sanctuary and Riverside – but all indicated they had no interest in the site.

The council’s Housing Strategy and Regeneration Service told planners it was “supportive of the removal” of the on-site affordable housing condition, in exchange for “an agreed commuted sum which considers costs incurred to date.”

However, the developer argued that professional, legal and design costs spent trying to secure an affordable housing partner already “considerably outweigh” any likely commuted payment, and that the project would not achieve the profit margin needed to support discounted sale units.

Planning officers accepted that position and recommended deletion of the affordable housing condition without a commuted sum, stating that the developer had “exhausted” attempts to secure a registered social landlord and that viability concerns were a material consideration.

At the hearing, several councillors expressed discomfort at losing affordable homes in a village where the need has been repeatedly highlighted.

Labour Councillor Ian Cavana questioned why no registered social landlord wanted to take on the units, despite the site being in what he described as “a very desirable place”.

SNP Councillor Craig Mackay said: “I do find this quite concerning when there’s such a big need for these affordable houses… to be taking them out is sending a completely wrong message.”

Officers and housing staff stressed that the council had tried to step in as a delivery partner.

Chris Carroll, Service Lead for Housing Strategy, told the panel it had been “over three years” of work with the developer, adding that they shared councillors’ frustrations and would write to the Scottish Government’s chief planner to highlight “flaws in the system” around delivering affordable housing through private developments.

Some members also questioned why the viability problems had not been identified earlier.

Councillor Cavana said he was “annoyed” that “hundreds of thousands of pounds” in work and negotiations had been spent only to reach a late-stage withdrawal, asking why it had not been made clear “at the beginning” that delivery might not be possible.

Officers replied that agreements between developers and social landlords were commercial contracts which the council could not force through, and that, in this case, both Ayrshire Housing and the council’s own housing service had ultimately been unable to proceed despite extensive work.

Planners said those condition-compliance issues would be investigated separately and that any revised layout for the northern part of the site would require a fresh planning application.

Despite the misgivings, councillors ultimately backed the officer recommendation to approve the application and delete condition 19, which required the 13 affordable units to be provided on site.

Councillor Alec Clark, who suggested the situation highlighted the flaws in the process, accepted the recommendation and moved approval “to avoid a site that is left unfinished”.

The recommendation was approved with five members voting in favour, one voting against and one abstaining.