INCREASED building costs have again hit a housing project – this time delaying and increasing the cost of 24 homes at Herbert Avenue, Poole.

The BCP Council project is designed to help take families out of bed and breakfast and other temporary housing solutions.

The initial preferred bidder, a Finnish company, pulled out the project in January 21, forcing the council to go back to the market to find a new developer, said to be a local company, although un-named at this stage as the contract has not yet been signed.

Cabinet members heard that the delay, coupled with rising material and labour costs, brought on by Brexit and Covid, had increased the budget from £2.5m to £3.4m, although over time it should produce a saving on having to accommodate families in bed and breakfast and other temporary schemes.

The authority is currently paying for 135 households in bed and breakfast accommodation although the numbers have been gradually reducing.

The Herbert Avenue site is owned by the council and is laid to tarmac with a green space at the rear. It was last used as a community centre which has since been demolished.

With a planned 24 flats over two storeys the new homes could accommodate up to 94 people and, subject to consents, is expected to start in January 2022 with a completion date of March 2023. The majority of the properties are two-bed, designed for families.

More than £1m from Right to Buy receipts are expected to be used to part-fund the project with the rest raised by borrowing through the council’s housing revenue account and paid back over a period of 50 years.

By adopting passive build standards the new homes should be cheaper to run than conventional properties, helping tenants keep their fuel bills down and contributing to the council’s climate emergency aims.

Deputy council leader Philip Broadhead told the council’s cabinet meeting that the expected rent levels for the flats to be half that of using bed and breakfast accommodation.

Backing the spending bid portfolio holder for people and homes, Cllr Karen Rampton said: “I really wish we could have this sooner, but I look forward to opening day.”