A FIRM which wants to build flats in the heart of Winchester is taking city planners to a Government appeal in a row over affordable homes.

Civic chiefs have demanded Whyte Homes pay £40,000 into the council’s affordable housing fund as it builds three secluded apartments in Parchment Street.

But the developer said it can’t afford to pay the sum, which has already been negotiated down from £164,000, as it has taken out a high-interest loan to fund the scheme.

Whyte Homes director James Le Chevalier is taking the case to the national Planning Inspectorate, which can bypass councils to fast-track decisions under legislation introduced last year.

Goadsby estate agent’s Peter Atfield, representing Whyte Homes, said Mr Le Chevalier has never overseen a development and had to take his loan from a secondary lender which charged double the interest of a mainstream bank. He said an affordable housing payment would cut too deeply into the firm’s profit margin or construction budget.

“The council have said ‘we’re not interested in what the finance arrangement is’ [because] theoretically it could be a lot less,” he added.

A city council spokesman said its aim was “to ensure that this scheme – in common with all such developments – meets its policy obligations by making contributions appropriate to its viability. The applicant has a right to appeal if he disagrees with the contributions being sought by the council.”

In a statement, Mr Le Chevalier said he is lodging the appeal for guidance on the “correct interpretation” of planning law.

The two and three-bedroom flats, featuring two bathrooms, a garden and a private entrance, will cost between £365,000 and £425,000 each.

The appeal is expected to be determined in the next three weeks.