DEVELOPERS have been given permission to build 200 homes in York with no affordable housing commitment, following a legal ruling that could have huge city-wide implications.

Water Lane Ltd can now build on the old grain stores site in Clifton without restrictions, after a national planning inspector said City of York Council must be more flexible in its policies.

The council said it was disappointed and surprised by the decision and it is seeking legal advice, evidently with a view to a possible appeal.

Council officials had demanded that 25 per cent of the proposed homes be designated as affordable housing – typically socially-rented homes – but the developers said that would make the site unviable.

They suggested 15 per cent, but national planning inspector John Gray has now granted permission with a zero per cent commitment. He said the amount of affordable housing should instead be decided in the future if the economy improves.

Mike Slater, the council’s assistant planning director, said: “This decision is both disappointing and surprising, as it directly contradicts the decision of the inspector overseeing the Inquiry on January 17, 2012, on this case and is contrary to previously established national practice and approach. We are currently taking legal advice on this matter and will comment further in due course.”

But the ruling was welcomed by critics of the council’s affordable housing rules, who hope it will prove a landmark case, potentially breaking the housebuilding impasse at other sites.

John Reeves, chairman of The Helmsley Group, called the decision “a victory for common sense and York’s public”. He said: “We need homes, and politically-driven affordable housing targets which prevent homes for the majority being built are causing irreparable damage.”

Ian Gillies, leader of the council’s Conservative opposition, said: “This decision confirms what we have been saying for many years regarding the policy on providing affordable housing.”

He said the inspector acknowledged the difficulties faced by developers and said the Labour cabinet should abandon “political ideology”.

The city council has long demanded that a percentage of new homes be affordable and the current rules use a sliding scale to determine the percentage, depending on the size of the development.

Mr Gray said the principles behind supporting affordable housing were robust and popular but flexibility was needed to ensure the total number of homes built was not “unacceptably depressed”.

He said: “The shortfall of housing land in the city of York means that the need to identify deliverable housing land is inescapable.”

He also said the grain stores site could be turned into housing quickly and development “should not be unduly delayed by seeking too high a percentage of affordable housing”.

Matthew Laverack and Paul Cordock, outspoken critics of the council’s housing policy, also welcomed the appeal ruling.

Mr Laverack said: “Inspectors are finally recognising that imposing burdens does not get houses built. It gets them stopped. It is developers who decide whether or not a scheme goes ahead.”

Mr Cordock said the decision exposed council “deception’ over its recent Get York Building report, in which it was said the affordability rules were not an issue at sites such as the grain stores.

He said the council had refused to release the report survey and said he had reported the matter to police and was demanding an investigation.