Major housing developments in limbo after construction company goes bust

Housing work stops on West Way South Shields due to building company going bust
Housing work stops on West Way South Shields due to building company going bust

THREE major new housing developments in South Tyneside are in limbo today after a construction company went bust.

The future is uncertain for eighty-eight affordable homes being built at three locations across the borough – at Saxon Way in Jarrow and in West Park and at Simonside Park in South Shields.

Property building work stops at Saxon Way Jarrow.

Property building work stops at Saxon Way Jarrow.

Work on the three sites has been halted after Yorkshire-based construction company Southdale collapsed with the loss of 30 jobs.

A spokesman for South Tyneside Council said the authority was now in discussions with Southdale’s administrator to ensure the remainder of the work at all three sites was completed with “minimal disruption”.

The company’s demise is a blow to a five-year-plan to build 400 new homes in the borough through the South Tyneside Housing Ventures Trust Ltd.

The trust was established two years ago to take the lead role in building desperately needed affordable homes for rent or shared ownership on behalf of the council.

The properties are to be managed by South Tyneside Homes – which looks after the borough’s social housing stock of about 18,000 – and allocated through the council’s allocations policy.

Brian Scott, company secretary of South Tyneside Housing Ventures Trust, said: “We currently have a contract with Southdale to build 88 properties at three sites in the borough.

“These properties are in various stages of completion.

“We are in discussions with the administrator to reach a solution which will allow outstanding work to be completed as soon as possible with minimal disruption.”

Work started on the £4.6m development in Saxon Way last July and had been due for completion in March.

Southdale first moved into the North East in 2010 and has conducted projects for a range of registered landlords across the region.

How the Trust was created

South Tyneside Council’s ruling cabinet approved the Housing Ventures Trust as a registered provider of social housing on July 10, 2013.

It was a joint venture between the council and South Tyneside Homes.

The aim was to develop new homes to meet the borough’s housing needs and supply local jobs and apprenticeships.

It was funded through a combination of a council loan and a £440,000 grant from the Homes and Communities Agency.

The not-for-profit company can access private finance and grant funding that is not otherwise be available to the council.

The first three schemes were for 55 homes at Saxon Way, Jarrow, 33 homes at West Way, South Shields, and the purchase of 20 bungalows for rent at Simonside Park, South Shields.