By John Baron
Developers behind the stalled Kirkstall Forge development are looking to renegotiate the structure of a legal agreement which they claim is preventing new housing being built on the site.
Developer CEG is in advanced discussions with developers Banks Homes and Vivly Living to progress plans for 220 dwellings on the eastern part of the site. A detailed planning application is expected in early 2026.
But developers say a legal agreement – called a section 106 agreement – would require them to pay £7.04million in one instalment for wider community improvements. They say it is no longer viable, and are asking Leeds City Council to restructure it into three payments.
S106 agreements typically provide financial contributions by the developer to compensate for any loss or damage caused by the development, or to mitigate a development’s wider impact.
Last week a planning application was submitted to the council to renegotiate the agreement, which would see a single £7.04 million payment triggered prior to the occupation of more than 149 dwellings on the site.
A report submitted on behalf of land owner GMV Twelve Ltd stated: “…the S106 in its current form is actually precluding the regeneration outcomes forecast for the site because it is not viable for the applicant to proceed with the construction of dwellings due to the contribution being triggered.”
The report adds there are issues over the viability of the scheme.
“The sheer cost of remediation and infrastructure has been considerably more significant than ever expected. Costs of circa £60 million have already been incurred,” the report says.
“The provision of the route through and to the eastern access will also incur a cost of £7.6 million. This is to be added to the what is now a S106 contribution of £7.04 million prior to occupation of more than 149 dwellings. These huge bullet payments are simply not affordable.”
It says the payment is no longer required for improving Horsforth roundabout as originally agreed. And it suggests the contribution should now to be used for affordable housing, education and community benefits.
The re-phasing of the payments would allow residential development to “come forward much quicker”. The promised new structure would be:
- 33% to be paid prior to occupation of more than 15% of the dwellings;
- A further 33% to be paid prior to occupation of more than 50% of the dwellings; and
- Rhe remaining 34% to be paid prior to occupation of more then 75% of the dwellings.
Leeds City Council planning officers will now decide the application, with a decision due by Monday, 5 January 2026.
The planning application and documents can be read in full here.
Background
CEG last month entered administration, with the company insisting Kirkstall Forge was unaffected.
CEG said in July 2023 that the development had been ‘paused’ due to factors including the Covid pandemic and war in Ukraine.
In July, Kirkstall Forge hosted a public consultation ahead of fresh housing plans being submitted for the site, which had seen construction stall for a number of years. In June Banks Homes became CEG’s first joint venture delivery partner at Kirkstall Forge.
The site currently features a commercial and office block and a train station.
- More Kirkstall news and views from WLD can be found here.
- Follow WLD’s ongoing coverage of Kirkstall Forge here.
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Developer asks Council for permission to build houses. Council gives permission if developer pays £X.XX. Developer agrees and starts building houses. Developer then asks Council to rip up agreement because it can’t afford the agreed money. Council agrees. Developer continues to build houses and makes millions in profit. How many times are we going to hear this story? Usually it’s about affordable housing. The developer wants to build 100 houses and tells the council that 25 of them will be affordable to local people. Once the building is approved and underway, the developer goes back to the council and claims it can only afford to build 5 affordable houses. The council, rather than holdtthe developer to the contract, agrees. Every time.
The affordable housing requirements are a funny one. It sounds good on paper, but the way it works is that it fixes housing at a % of the market rate. The market rate is driven up by supply-side problems, i.e., having less housing. Ironically, if we built thousands and thousands of new homes with 0 affordable housing requirements, the market rate would come down, which would have a bigger effect on affordability than setting affordable housing requirements!
The deal for new housing in an area for these faceless aside from companies house firms profiteering from rents and selling very expensive houses;
Is that they pay their Local Council Taxman his pound of section 106&Community Infrastructure Levy flesh to fund street upgrades, local parks, play areas, EV charging ports, local NHS GP practices hiring more nurses , funding for the local schools to educate new families that arrive from London escaping the smog willing to buy the higher end cost expensive 4-5 bedroom houses etc.
If they lay S106 to help the community alot, then they get to make loads of money.
It’s not difficult. Greedy developers make Capitalism look bad and aliens young people like me from society and the housing ladder
Alienates*
Ah carnt spell ryte well