A developer wants to cut the number of affordable houses provided at its new Thurston estate, blaming the unstable economic climate.

Matthew Homes Ltd has applied to Mid Suffolk District Council to reduce the number of affordable homes from 35% of the 64 units to just 12.5%.

Under the proposal, there would be four flats and four houses available on a shared ownership basis on the site at Meadow Lane.

In its application, Matthew Homes said: “Construction costs have risen rapidly over the past few years whilst house prices have remained static and, in many instances, started to decrease. The cost of borrowing has increased substantially as a result of the general economic climate.

“Added to this the Housing Association market has taken a much more cautious approach to Section 106 affordable housing and for those that are still interested the amount they are prepared to offer for the units is at a much-reduced level than they were previously offering.”

The builder has provided a financial viability assessment to support its application, which claims the company would lose more than £100,000 from the benchmark land value if the 35% affordable homes went ahead.

But this figure is calculated with the builder taking £3.6million profit from the development.

A consultation on the application closes on Tuesday, June 4.