Former Aldi Hythe Plan: No Affordable Housing, 43 Parking Spaces at Risk – The Long Read
For seven years, Hythe has had a hole in its High Street where the old Aldi used to trade. The shutters came down in 2019, the supermarket moved to Kengate Industrial Estate, and the empty building was left sitting beside the town square like an unplugged fridge nobody could be bothered to shift. Churchill Living Ltd application 26/1039/FH now offers an answer: demolish it, build 32 retirement apartments and two retirement cottages, put 179 square metres of commercial space back along the frontage, add an owners’ lounge, guest suite, courtyard and parking, then call the whole thing regeneration. It might be. But the small print asks Hythe to swallow two awkward facts at once — not one affordable home, and a public town-centre car park cut from 85 spaces to 42. That’s the bargain on the table.
Nobody with their head screwed on wants the former supermarket preserved in aspic. It’s vacant brownfield land in the middle of town, not a beloved landmark or some lost Georgian gem. The earlier 2022 scheme for 35 flats and five commercial units never reached a decision; after further information was requested and not supplied, the council disposed of it as undetermined in December 2025. Churchill’s application is a fresh throw of the dice, built around specialist housing for older people rather than ordinary flats. It deserves to be judged on what it actually offers, not damned merely because a developer expects to make money from it.
And there is plenty to like. The site is close to shops, buses, doctors and everyday services. The supermarket is a clumsy lump in the conservation area. A good replacement could mend the High Street frontage, light the windows and bring residents into town during quieter weekdays. Churchill calls its customers “daily shoppers”; anyone who knows how high streets survive will understand. They live on repeat custom — prescriptions, bread, coffee, cards and bits and bobs — not ribbon-cuttings and speeches from people wearing chains of office.
Yet the deeper one digs into the application bundle, the less this looks like a simple tale of an eyesore rescued by benevolent brickwork. It’s a story about who gets the uplift when a dead commercial site becomes valuable housing; how seven policy affordable homes are reduced to two and then to none; how 43 public parking spaces are treated as a manageable inconvenience; and how bold economic promises sit beside caveats, modelling assumptions and one glaring drafting howler. The papers don’t reveal a villain twirling a moustache. They reveal something all too familiar in today’s English planning system: public policy going into a spreadsheet at one end and coming out several sizes smaller at the other.
The first dissappearing act begins with a policy called “Balanced Neighbourhoods”.
Folkestone & Hythe’s Core Strategy says the district needs 139 affordable homes a year, or 2,640 over the plan period. It describes a 22% contribution from qualifying sites as “realistic and deliverable”. For developments of 15 homes or more, Policy CSD1 starts from 22% affordable housing on site, with roughly 70% of those homes intended for affordable or social rent. Churchill proposes 34 homes, so the starting point is seven affordable dwellings. That isn’t a campaigner’s wish list or a figure pulled out of a hat. The developer’s own viability report says plainly that the policy produces “a requirement for 7 units of affordable housing”.
Seven goes in. Today, nothing comes out.
Churchill first argues that seven age-restricted affordable homes would be an awkward fit inside a private retirement block. Its viability report says registered providers generally won’t be interested in managing such a small number, particularly where communal services and service charges have to be controlled for the long haul; providers, it says, typically want at least 40 affordable units in a self-contained block. That may be perfectly genuine. A handful of affordable flats sprinkled through a specialist scheme can pose management headaches. But that argument alone only explains why on-site provision may be difficult. It doesn’t explain why Hythe should receive no equivalent payment elsewhere, no later contribution if the scheme does better than forecast, and no affordable benefit at all.
For that, the report reaches for Vacant Building Credit. It sounds like something handed out at a fête, but it can take a hefty bite from affordable-housing obligations. The mechanism credits qualifying vacant floorspace being reused or replaced. Churchill counts about 2,088 square metres in the old Aldi against 2,937 square metres of proposed residential floorspace, reducing the affordable requirement from 22% to 5.5%. Seven homes become two. The report then calculates a policy-compliant payment of £133,958. At that point, at least, the affordable-housing cupboard still contains a tin of beans.
Then viability empties the shelf.
The conclusion is admirably blunt: “no financial headroom exists” for an affordable-housing contribution. The £133,958 disappears because, according to the appraisal, paying it would push the residual land value further below the site’s benchmark and make the proposal unviable. This is the crucial distinction residents ought to be told without flannel. The scheme isn’t merely providing fewer affordable homes because of the old building. It’s offering no affordable homes and no affordable-housing payment after both Vacant Building Credit and viability have done their work. CIL, estimated in the report at £416,609, doesn’t change that. The Community Infrastructure Levy is an infrastructure charge; calling it affordable housing would be like claiming the electricity bill has paid the rent. That difference is the heart of this application’s problem.
Viability isn’t automatically a fiddle. Brownfield sites can be awkward old beasts, with demolition, asbestos, poor ground, contamination, archaeology, finance and empty-property costs all waiting beneath the floorboards. Churchill’s report identifies £534,235 of site-specific extras: £218,000 for demolition and asbestos, £228,385 for piling and ground beams, £26,310 for contamination treatment and capping, £41,540 for archaeological work and £20,000 for highway works. Those aren’t amounts to be brushed aside with a wave and a clever line. If they’re properly evidenced, they’re real money and they matter.
But viability is where every assumption earns its keep.
The appraisal allows a 20% developer return on gross development value, a 7.5% borrowing rate, 5% of sales revenue for sales and marketing, legal costs on each sale, and £198,475 for council tax, service charges and other costs on finished but unsold properties. It assumes one apartment sale a month over 32 months, even though Churchill’s own South East division was averaging 0.59 sales a month across 31 live sites. Oddly, the report calls the faster one-a-month assumption “highly ambitious”. That faster rate should help viability by reducing finance and empty-home costs, but the bundle leaves the council with a model whose moving parts must be tested, not admired from the pavement. Every assumption deserves testing against evidence, comparable schemes and actual local sales.
The biggest cog is land. Churchill sets the benchmark land value at £1.65 million and calls it the “absolute minimum threshold” below which the site wouldn’t be secured for redevelopment. No separate landowner premium is added because the property has been vacant, but the report says a rational owner could consider a private residential alternative of broadly the same floorspace, use Vacant Building Credit and deliver “no affordable housing”. There’s a whiff of the snake eating its own tail here: a no-affordable-housing alternative helps establish the land value against which no affordable housing is said to be viable. That doesn’t prove the benchmark is wrong. It does mean an independent valuer needs to pull it apart bolt by bolt.
The report’s author, Damien Lynch MRICS, declares impartiality and says his fee isn’t performance-related. That should be reported fairly. So should the other side: the assessment was produced for Churchill Living, while Churchill’s design material describes Planning Issues as its wholly owned town-planning consultancy. There’s nothing improper about a developer preparing evidence; that’s how the system works. But when the result is zero affordable housing, the council’s job isn’t to nod at the sums. It’s to commission its own reviewer, provide the live model and ask every awkward question the applicant would rather have settled.
The case for a clawback is staring the council in the face.
A clawback, or late-stage review, simply checks later whether the development did better than the original forecast. If sale prices rise, flats shift more quickly or costs come in lower, some of the unexpected gain can be captured for affordable housing. Churchill’s own bundle contains a recent appeal decision concerning a retirement scheme elsewhere, where the argument wasn’t whether this type of development could ever pay, but how much it could support. The developer said £337,419; the council said £700,000. The inspector landed between the competing evidence. Different town, different site, different sums — absolutely. But it knocks on the head any suggestion that retirement housing and affordable contributions are creatures from separate planets.
Hythe knows this tune.
Kingston Homes’ Station Road scheme proposed 40 market homes with “no on site affordable housing proposed”. Independent review found the scheme was unlikely to support a contribution at that stage, so officers pursued a mechanism to capture money if sales values improved. Foxwood is more revealing still. Its applicant’s consultant initially said no affordable-housing contribution could be made; the council’s reviewer first found a large surplus, then revised the position after further cost evidence and described the scheme as “finely balanced”, with a late review recommended because even a moderate improvement might produce a payment. That history doesn’t justify lazily branding every nil contribution a con. It shows exactly why the first answer from the developer’s spreadsheet can’t be the last word before public benefit is written off for good.
Now Churchill brings Hythe a third major housing scheme where the affordable homes aren’t there at the starting gate. The circumstances differ, but the public outcome has an uncomfortable family resemblance: Station Road, none on site; Foxwood, none secured up front under the latest viability position; former Aldi, none on site and no payment proposed. At some point, councillors have to look beyond each separate file and ask what the pattern does to their own promise of balanced neighbourhoods. A policy that repeatedly becomes a review clause, a future possibility or a polished explanation for zero is beginning to resemble a watchdog with its teeth in a glass beside the bed.
That’s not an argument for pretending money grows on scaffolding. It’s an argument for daylight. Publish the independent review as far as the law permits. Test the £1.65 million land value, 20% return, sales evidence, £534,235 abnormal costs and Vacant Building Credit. Secure a review capable of collecting the £133,958 — or more, if evidence supports it — rather than letting today’s forecast become tomorrow’s permanent free pass. If the scheme genuinely can’t bear a penny, residents may dislike the answer, but at least they’ll know it wasn’t cooked in one kitchen and served as a fait accompli.
Then there’s the car park, where numbers are easier to picture and harder to disguise. Mount Street has 85 spaces: 78 ordinary bays, four disabled bays and three electric-vehicle bays. Churchill’s Transport Statement offers a “possible” reconfiguration to 42, three of them disabled. Nearly half the capacity goes. In raw arithmetic, 43 spaces vanish. In High Street arithmetic, that’s people nipping to the chemist, grabbing lunch, visiting the bank, carrying shopping, meeting a friend, collecting a prescription or deciding it’s too much bother and heading elsewhere. Parking isn’t the only thing keeping a town centre alive, but 43 spaces aren’t a light dusting.
Churchill has a respectable answer on traffic. The development is forecast to generate 476 fewer daily vehicle movements than the former supermarket and nine fewer than the abandoned 2022 flats scheme. That stands to reason. Thirty-four retirement homes and two modest commercial units won’t behave like a discount grocer with deliveries, staff, trolleys and shoppers coming and going all day. Anyone claiming the new scheme will recreate Aldi-level traffic would be barking up the wrong tree.
But traffic generation and public parking plainly aren’t the same kettle of fish.
Churchill’s survey counted four Hythe car parks every half-hour between 7am and 7pm on Friday 24 and Saturday 25 April 2026. If Mount Street had already been reduced to 42 spaces, 20 vehicles would have been displaced at the busiest weekday point and 36 at 12.30pm on the Saturday. The consultant says those cars could fit into other surveyed car parks and points to additional on-street and private retail parking. Technically, that may add up. Practically, it means three dozen drivers leaving the car park they chose and hunting for another bay at lunchtime. A space on a spreadsheet isn’t always the space a person can sensibly use.
Hythe isn’t a laboratory that holds its weather, visitors and diary still. Two April survey days provide a snapshot, not the family album. A warm summer Saturday, school holiday, festival, Christmas rush, funeral or bank holiday can change parking demand faster than someone flips a “full” sign. The applicant repeated the methodology used for the former scheme, which is useful for comparison, but repetition doesn’t turn a limited sample into gospel. If the council is going to accept a permanent 43-space reduction, it ought to know whether April was typical, generous or quietly flattering. Otherwise, the evidence is a photograph taken from the best side and passed off as a full medical.
Kent County Council Highways hasn’t given Churchill an unqualified victory lap. Its July response calls the surveys “relatively finely balanced at peak periods”. KCC accepts alternative capacity and doesn’t regard the loss as a sustainable highway reason for refusal, but tells Folkestone & Hythe to consult its own parking team about losing the spaces. That division matters. KCC has answered the road-network question. It hasn’t settled parking income, turnover, disabled access, seasonal demand, shopper behaviour or the everyday workings of the town centre.
The disabled bays deserve more than a footnote. All four at Mount Street were occupied together at several points on both survey days, yet the indicative replacement has three. One bay may sound small beside a 34-home development, but it’s a quarter of the current disabled provision in a car park where the evidence already shows full occupation. There is a world of difference between telling someone another car park has theoretical capacity and asking a person with limited mobility to make the extra journey. Accessibility isn’t a ribbon pinned to the Design and Access Statement. It’s whether the route works properly in the real world on a wet Tuesday when your knees are playing up and the prescription still needs collecting.
Another loose floorboard sits in Bank Street. The Transport Statement places a loading bay where two disabled-user bays now sit, while the Planning Statement says a traffic order would amend “some” parking. Will those Blue Badge bays be removed, shifted or replaced? The documents aren’t clear here. Add Mount Street and the scheme may bite disabled provision in two places while selling older people’s independence. That can be fixed, but it must be fixed before permission, not left until the planning horse has bolted.
Even the route to the cottages raises an eyebrow. The dedicated footway from Mount Street would be 1.1 to 1.2 metres wide. The Transport Statement acknowledges two metres as the normal minimum, then cites guidance allowing an absolute one-metre pinch point over a short distance where there is an obstacle. Here, the narrowness comes from juggling cottages, gardens, parking, landscaping and existing walls. The consultant deems it acceptable. For housing aimed at older residents, “a shade above the absolute minimum” isn’t exactly a boast for the people expected to use that narrow route safely every day.
Private parking is lean too: 11 spaces for 32 apartments and one for each cottage. Kent’s usual town-centre standard points to 34, but Churchill says surveys of 20 occupied developments show average demand of 0.28 spaces per home, while the apartments here get 0.34. KCC accepts that if retirement use is secured by condition. Rational enough. It still leaves, in practice, human traffic absent from resident car-ownership figures — family, carers, nurses, cleaners, tradespeople, taxis, deliveries and friends who stay when a quick visit becomes a long afternoon.
Churchill’s own portrait of its customers makes those questions sharper. Its Planning Statement says the average apartment purchaser is 81, the average occupier is in their late eighties, and around 70% of apartments have one person. People often move after bereavement, a fall, reduced mobility or because their old home has become too much to manage. That is a strong argument for living beside shops and services. It’s also a reason not to treat visitor access, loading, Blue Badge bays and usable footways as fussy extras. Older residents don’t live in transport models; they live in homes where real life arrives carrying shopping, medical bags and muddy grandchildren.
The car-park drawing is labelled “INDICATIVE CAR PARK LAYOUT [DESIGN TBC]”. Honest, but hardly reassuring. The application includes Aldi-owned land within the public car park and excludes the council-owned part. The papers say the 42-space answer “could” be done. Could isn’t will. Before approval, the public needs to know who owns each piece, who pays, when work happens, what agreement protects public use and what occurs if the layout can’t be delivered. The scheme’s biggest public trade-off still wears a name badge marked “to be confirmed”.
That uncertainty makes Churchill’s local consultation look thinner than advertised.
The company wrote to about 332 addresses, briefed politicians and groups, put boards in Hythe Library, met town and district councillors and ran an online consultation from 18 to 31 May. The site recorded 396 views from 122 users. Only 13 feedback forms came back. That doesn’t invalidate consultation; planning isn’t a show of hands. Nor is it Hythe giving a hearty thumbs-up either. For a proposal removing almost half a public car park and offering no affordable housing, it’s thin gruel rather than a feast of involvement.
Churchill told residents their comments would “help steer the proposals”. The neighbour letter advertised 165 square metres of commercial floorspace; the final application increased that to 179, so something changed for the better. But the two sorest issues appear to have sailed through untouched: the car park remains an indicative 42-space sketch and the affordable-housing contribution remains zero. A useful Statement of Community Involvement ought to show the criticism, the answer and the resulting alteration. Counting clicks without demonstrating the steering risks turning engagement into a suggestion box whose bottom nobody can find.
The economic case arrives wearing its Sunday best. Lichfields estimates about £7 million of construction investment, 38 net full-time-equivalent construction jobs, £3.9 million in construction-related gross value added, 13 net ongoing jobs, as much as £893,700 in annual gross value added, £23,300 a year in business rates, £263,300 of local resident spending, 68 homes released through housing chains and £154,700 a year in NHS savings. Those aren’t exactly meaningless figures. They are, however, modelled benefits built from multipliers and industry research, not money waiting in a brown envelope behind the planning notice.
One typo tells its own little story. The report first says construction would take 18 months, then calculates benefits over a “14-year construction programme”. Unless Churchill plans to finish around the time today’s apprentices are contemplating retirement themselves, that is plainly a drafting error. It doesn’t demolish the economic case, but it’s exactly the sort of loose screw that should make readers look twice at a document full of precise-looking outputs. When a model produces benefits to the nearest hundred pounds from assumptions stretched across several studies, the sensible response is neither sneering disbelief nor blind faith. It’s to ask what’s guaranteed, what’s likely and what’s merely possible.
The physical bargain is plainer. A 2,088-square-metre vacant store goes; 179 square metres of Class E space returns. Lichfields found eight other vacant retail units, a low 3.8% vacancy rate and no forecast need for extra floorspace once vacancies are counted. That supports losing an obsolete supermarket floorplate. It also means less than a tenth of the old commercial area comes back. Smaller units and active frontage may be more useful than a dead big box, but “retail restored” shouldn’t sound grander than 179 square metres in the finished scheme.
Nor should “daily shoppers” be treated as a magic incantation. Thirty-four homes may bring useful custom, particularly during quieter weekdays, and Churchill’s location is about as central as it could reasonably be. Yet the same proposal removes parking used by existing customers. The town may gain residents who walk to the baker while losing motorists who can’t find a space near the chemist. Both effects can be true. The planning bundle puts a pound sign on one side and calls the other displacement. Hythe’s traders will experience the net result directly in the till, not in the footnotes.
The claim that 34 retirement homes could release 68 other properties through housing chains needs care. Downsizing can free larger homes and help the market move; there is a social benefit when an older person finds a manageable home and a family moves into the house left behind. But a market house returning to sale isn’t affordable housing. For a local household without the deposit or income, “released” and “affordable” are chalk and cheese. The chain-reaction claim can sit in the benefits column. It cannot fill the seven-home hole opened earlier in the spreadsheet.
Heritage is by far Churchill’s strongest card here.
Hythe’s conservation appraisal already treats the supermarket and car park as a damaging interruption to the historic grain. The Heritage Impact Assessment calls the store an “over-scaled, bulky building” and says a lower, more articulated replacement would reinforce the High Street, improve nearby listed-building settings and better reveal the prominence of St Leonard’s Church. That’s credible. The present building has all the charm of a chest freezer pushed into a fron room. Demolition could genuinely improve the conservation area, provided the replacement’s materials and detailing survive value engineering and don’t end up as a standard retirement block wearing a Hythe hat. Better than Aldi is a start; it isn’t the finish line, and the detailing must survive construction.
The buried story is more intriguing than the building above it. The archaeological assessment says the site has “notable archaeological and geoarchaeological potential” because of its position near Hythe’s former shoreline and harbour. Deep alluvial deposits may preserve old channels, mudflats, saltmarsh, wetland and buried land surfaces, while historic mapping shows development along the frontage from at least the seventeenth century. Much of the ground has already been disturbed by the supermarket, and piling may limit damage to deeper sequences, but nobody can know what’s there by peering at a desk. The recommended programme — watching briefs, boreholes, trial trenches and test pits — is common sense. Hythe has lost enough of its past to bulldozers working ahead of the notebook.
Flooding is not the red flag some might expect from a low-lying coastal town, though the small print again matters. The site is in Flood Zone 1 today but is expected to move into Flood Zone 2 during the development’s lifetime as climate risk changes. The drainage report proposes rainwater harvesting, infiltration from parking and access areas, restricted discharge to the surface-water sewer and storage for a one-in-100-year storm with climate-change allowance. Foul water would use existing public connections beneath Bank Street “if feasible”. There are no fireworks in that conclusion, just a phrase needing a firm answer before work starts. “If feasible” is fine in a consultant’s report; it’s less comforting when water is heading the wrong way. That assurance must last decades.
Ecology is quieter still. The site is roughly 0.23 hectares of building and hardstanding, so nobody should expect a lost rainforest behind the trolley bay. Bat surveys found no emergence, and the assessment regards the site as negligible for roosting bats and of low or negligible value for most other protected species. The Biodiversity Net Gain Statement says the mandatory uplift can be achieved through new planting and habitat measures. That is plausible because the ecological starting line is so low. The test will be whether the promised greenery lasts for the required decades, rather than arriving as a few cheerful shrubs before maintenance budgets and salt-laden weather take the shine off them after one winter.
The corporate trail adds context, not a planning reason for refusal. The applicant is Churchill Living Ltd, an active private company. Companies House shows its direct person with significant control is Churchill Living Group Ltd, holding at least 75% of the shares; that is more precise than describing Churchill Living (Developments) PLC as the applicant’s ultimate owner. Churchill’s website names Spencer McCarthy as chairman and chief executive, Clinton McCarthy as managing director, Dean Marlow as chief financial officer and deputy chief executive, and Martin Young as partnerships managing director. These are experienced operators in a mature specialist market, not unknowns arriving with a company formed last Tuesday and a mobile number scribbled on the hoarding.
A check of the ICIJ Offshore Leaks database lists Spencer McCarthy (below left), Clinton James McCarthy (centre) and John Sidney McCarthy (right) as shareholders in Upwind 2 LP, incorporated in Malta in February 2015. Upwind 2 LP was subsequently struck off, and the Maltese authorities removed its company documents from the register; the latest publicly accessible record we found runs only to April 2017. ICIJ’s own warning is equally important: offshore entities can have entirely lawful purposes, and appearing in its database doesn’t imply illegal or improper conduct. Nor does any of this have any bearing on the planning merits of Churchill’s application or on any decision made by council officers or councillors. On any fair reading, it is an historical corporate fact, not a verdict — and dressing it up as anything more would be cheap journalism.
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