UNCERTAINTY hangs over York’s housing policies after city leaders lost a legal challenge, allowing developers to build 200 homes without including any affordable ones.

The High Court yesterday dismissed City of York Council’s attempt to overturn a Government planning inspector’s ruling that Water Lane Ltd (WLL) can build on the former grain store site at Clifton with no affordable housing commitment.

The authority played down the potential implications for other city sites, but developers said a precedent had been set.

The council, which brought the case against WLL and the Secretary of State for Communities and Local Government, wanted 25 per cent of the Clifton homes to be affordable, but WLL said this would leave it with a £1.7 million loss.

It appealed, and national planning inspector John Gray decided WLL could build with no affordable commitment.

He said the council needed a flexible policy because of York’s housing land shortage, and said affordable homes could be provided at the grain store site in future if the economy improved.

In its appeal, the council claimed Mr Gray’s reasoning was “inadequate” and his decision “irrational”, but both defendants said it was “sufficiently clear”.

Giving his judgment, Judge John Behrens said Mr Gray believed developments like the Clifton scheme “should not be unduly delayed by seeking too high a percentage of affordable housing”.

Mike Slater, the council’s assistant director of city and environmental services, said the judgment supported York’s need for affordable homes, and the position at the site had now been “clarified”.

But he said: “Because this was such a complex and difficult case, we are confident this was unique and will not create a precedent for future developments.”

Mr Slater said the council, which must pay the Government’s £8,648 legal costs, would work with the Clifton site’s owners and developers and he hoped affordable housing could be included as the economy recovers. WLL has yet to comment.

John Reeves, chairman of developers The Helmsley Group, said: “It’s a victory for common sense – the inspector felt the need for development was greater than the need for affordable homes, and there are probably implications for lots of York sites.

“I believe it justifies the stance many developers have been taking, that the inclusion of affordable housing makes development very difficult to deliver.”

Daniel Gath, managing director of Daniel Gath Homes, said the case “inevitably” set a precedent, but said: “We have to provide affordable housing as there is an acute shortage and I think York’s quotas are much better than they were and the council has been open to negotiation.”