Huge hexagonal apartment block to be built in Preston after affordable housing deal

A deal has been struck which will see Preston City Council handed more than £600,000 by the developer behind a 19-storey tower set to be built in the university quarter, on the former gas training centre site at the junction of Walker Street and Moor Lane.

The cash will be used to fund affordable housing on other plots within Preston to compensate for the fact that there will be none with the 120-apartment scheme itself.

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The hexagonal-shaped building - which has a five-storey adjoining section - was granted permission by the city council last July.

At that point, it had been proposed as a ‘build-to-rent’ development, meaning tenants would be offered leases of at least three years - and all of the flats would remain available for rent for 30 years before they could be sold.

Portergate Developments (Preston) Limited - the company behind the blueprint - successfully argued that the project would not be financially viable if it were forced to meet a planning quota that would usually require a fifth of the properties within a build-to-rent scheme to be made available for ‘affordable rent’, which is at least 20 percent lower than market rates.

By November, the proposal was back before the council’s planning committee after Portergate sought to shift from the original rental vision for the site to one where the apartments would all be offered for sale, after claiming its previous plan was "too restrictive".

Councillors gave the go-ahead to the change - and the developer once again persuaded the authority that the scheme would be unviable if it was required to ensure 30 percent of the properties fell into the affordable housing category, as usually demanded by the city’s planning policies on open market developments.

However, the authority said its approval was dependent on agreeing a so-called “review mechanism” with Portergate, so that if the block generated a greater profit than was then being forecast, the city council could claw back a financial contribution that would be used to provide affordable housing elsewhere in Preston.

Although similar mechanisms have been agreed on other developments in the city that have been assessed as financially unviable, the latest meeting of the planning committee heard that negotiations over the arrangement for the Portergate scheme had become “protracted” because of their “complexity”.

In order to break the deadlock over a future review, the authority suggested an alternative deal under which the developer will pay £604,531 into a pot that the city council holds to fund affordable housing - a figure which equates to a 15 percent cash contribution, compared to the 30 percent that would be required under normal circumstances.

Planning committee member David Borrow said the arrangement meant the council now had a guaranteed amount, rather than one which would have depended on the outcome of a future viability review - a situation which he said had “advantages”. The committee approved the deal - which had been put forward by the authority’s planning officers - meaning the apartment development can now go ahead.

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However, as no review will now take place, the potential 30 percent contribution that may have been sought if the scheme had proved much more profitable than currently expected will not be achieved.