Slump hits Goodyear homes plan

The massive redevelopment of the former Goodyear tyre factory could become the latest victim of the housing slowdown, the site's owners revealed today.

The plan is to build 660 homes on the 85-acre site in Wolverhampton as part of a £150m project. But development firm St Modwen today warned housebuilders are no longer buying new land.

Although none of the Goodyear land has been put on the market yet, St Modwen's chief executive, Bill Oliver, warned the housing development of the site could be delayed.

"We are not selling any of our residential land at the moment because there is no-one to sell it to," he said.

"The last time we went to market with plots of housing land, in May and June, it didn't sell. We just don't know how long this situation will last.

"We are working on the basis we won't come out of this until at least 2010 now."

Originally St Modwen had hoped to start selling housing plots on the Goodyear site next year. Currently the site is being cleared so new access roads can be built, a process that is expected to take another six to nine months.

The site should eventually contain homes, shops, businesses and a replacement for Oxley Primary School.

It is one of a number of projects due to transform Wolverhampton in the next five years, including the Summer Row shopping complex.

Mr Oliver said: "One of the benefits of the Goodyear project is its large scale, which means it takes a long time so we will carry on renovating the site."

The warning came as the firm slashed the value of its housing land by £37.7m.

It also wrote off £16.9 m from its commercial portfolio.

The firm said it had made a half-year loss of around £20m, compared to a profit of £65.1m at the same point last year, as the industry faced its toughest time since 1990.