COUNCIL chiefs have been urged to review their controversial affordable housing policy ahead of talks with senior Government officials.

City of York Council officers and members are meeting with civil servants from the Department of Communities and Local Government this week as part of a fact-finding visit.

The aim is to get key messages across about how they are tackling the need to provide affordable housing in York, and asking what more can be done.

But Ian Hessay, director of York's biggest housebuilder Persimmon Homes, said it was the ideal opportunity for the authority to review its 50 per cent affordable housing threshold.

He revealed that property development in York was grinding to a halt because of the policy and warned that smaller building firms could go bust.

The Press recently revealed growing unrest among developers about the new threshold, who claim it is "not viable" and means less cheaper housing is built because they are forced to look for more lucrative sites elsewhere in the region. The previous threshold was 25 per cent.

Mr Hessay said the 50 per cent policy had not been fully tested as little land had become available in York in recent months.

"I would like the council to adopt a more flexible approach," he said.

"There are bound to be some sites that will be able accommodate the 50 per cent threshold but others will only be able to accommodate ten per cent or even none.

"Virtually no new houses are being built in York and there are a lot of smaller developers who will struggle."

But Derek Gauld, the council's principle development officer, said the council's Housing Needs Survey 2002 to 2007 provided evidence for the need for affordable housing policy in York.

"It shows a massive shortfall of affordable housing in the city and concludes that there is justification for setting a 50 per cent target for affordable housing on all suitable allocated and windfall sites," he said.

"It is important to note that the 50 per cent is a target which can be tested through negotiation and evidence work."

Mr Gauld said the threshold was approved in April 2005 and, since then, the council has approved some small schemes with 50 per cent affordable housing and is currently in negotiation on several larger schemes across the city, including Terrys.

Michael Croston, managing director of Rawcliffe-based Linton Construction, said: "At the moment, some aspects of the council's current affordable policy are a major impediment to future housing development in York.

"Many of the developers we talk to are holding off on progressing schemes in the city in the hope that arrangements can be put in place to make them more viable. We are not against the policy of affordable housing, but it's the degree to which we are being asked to consider it on some schemes.

"If we continue down this road, potentially everyone loses."

Council explains housing policy

In a statement, Derek Gauld, the council's principle development officer, said: "It is important to note that the 50 per cent is a target which can be tested through negotiation and evidence work.

"Similar targets have increasingly been put in place by other local authorities in recent years with no reported detrimental impact on the economic prospects of bringing forward sustainable sites.

"City of York Council recognises that new housing schemes need to be profitable to developers in order to proceed. Using the council's policy and supplementary guidance as a consistent base, we aim to work with developers and housing associations on a site by site basis in order to agree schemes that address the massive affordable shortfall in York and are also viable in terms of delivery.

"Where site viability is threatened by accepted abnormal site development costs, affordable housing expectations may be lowered."