A CONTROVERSIAL plan for 150 homes in a Herefordshire village has hit a stumbling block after the developer was unable to gain funding.

ArchiHaus was given permission by Herefordshire Council to build the new homes, despite strong opposition from the community who believed the development was too big for the size of the village.

But the Upper Twyford firm has released a statement to say they will not be taking the ambitious development forward as they were unable to gain funding.

Key to the plans was the idea of a “house factory” which would have seen the shell of the buildings constructed offsite on the Enterprise Zone at Rotherwas.

Jonathan Hines and Lars Carlsson, directors at ArchiHaus Ltd, said in a statement: "We worked closely with the government-backed Builders Finance Fund for nearly two years, had positive support and dialogue, and fully anticipated that we would secure the necessary finance through them to develop our exciting plans for Kingstone.

"Disappointingly an apparent change in their approach led to our finance being turned down at the final hurdle.

"The Government claims that the fund was designed to support small developers unable to gain standard finance, to stimulate house building, and to encourage the development of offsite construction.

"It is therefore deeply disappointing that their rhetoric did not translate into actual support for a scheme which we believe, and were continually advised by the Builders Finance Fund, so clearly met their aims."

The planning decision was published in September 2014 which only gave the developers a few months to find the funding before permission ran out.

Mr Hines and Mr Carlsson said: "This decision also coincided with the result of the BREXIT referendum, which has caused uncertainties in the housing development market, and consequently funders are less confident to lend.

"Despite relentless effort and hard work by ArchiHaus, it has not proved possible to raise finance in our own right."

They said they believed they have now secured a solution which will enable a scheme to proceed on the site and they have sold the land to Lagan Homes, who will take over the development in its entirety.

Lagan Homes has been contacted and will be releasing a statement shortly.

Mr Hines and Mr Carlsson added: "The directors of ArchiHaus feel badly let down by the government Builders Finance fund, and frustrated by the difficulty of raising finance in the current climate for our innovative scheme. We are disappointed that we are not able to proceed with the development in our own right."