A MAJOR new housing development in Basingstoke has stalled because of the credit crunch.

Merton Rise is a flagship development of 950 homes, a new secondary school, a supermarket and employment land to the north of Popley, being promoted by Hampshire County Council.

The first phase of housing and works to increase road capacity are nearing completion, and Everest Community College, in Oxford Way, opened its doors to pupils in September 2007.

But Hampshire County Council leader Councillor Ken Thornber has now rejected the remaining financial offers for land disposal because “they are unlikely to be sustained and also reflect the very poor market and values for residential development land, and the current economic uncertainties.”

Cllr Thornber authorised the council to proceed with a revised disposal strategy instead.

Asked to explain what this meant, Cllr Thornber said, in a statement, that the poor property market conditions were having an impact on Merton Rise and the county was reviewing the impact.

He added: “This review will include consideration of all future options to help facilitate the delivery of this project within both the prevailing and also future economic circumstances.”

No one at Hampshire County Council was prepared to explain the nature of the review in more detail or how long it would delay the Merton Rise development. The five-phase, 53-hectare development was originally scheduled for completion in 2011.

Phase one of the scheme, for 150 homes, was sold to Miller Homes and George Wimpey in April 2007, while marketing of remaining phases was due to be completed a year later.

Last spring and summer, Cllr Thornber gave the acting director of property, business and regulatory services, Karen Murray, permission to select preferred purchasers for phases two – which contains the shops and supermarket – three, and five, plus part of phase four.

The publicly available summary of Cllr Thornber’s decision to review Merton Rise appeared to partly blame changes in planning guidance from Basingstoke and Deane Borough Council for the latest delay, saying it had “effectively rendered the current offers unachievable”.

Nicky Linihan, the borough’s head of planning and transport, said the planning guidance issued by Basingstoke and Deane covered residential parking standards, recycling facilities, energy efficiency and good quality design.

She said: “The consequence of this is that some development proposals have to be reworked. We will continue working with Hampshire County Council, and any other developer of landowner in a similar situation, to ensure we provide much-needed homes and facilities.”