Initial plans to build 55 flats on the site currently occupied by Matthews Yard have been shot down, not by Croydon Council, but by the mayor of London.

A planning application was submitted in March this year to demolish the arts hub in 5-9 Surrey Street and replace it with 55 flats (34 per cent of which would be affordable).

That same month, Sadiq Khan received documents from Croydon Council notifying him of the planning application.

But after two months of consideration he has decided that the proposal "does not comply with the London Plan" and will need to be updated.

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"The provision of 34 per cent affordable housing does not meet the threshold for the ‘Fast Track Route’ nor is the tenure mix currently supported," a case report prepared by GLA's planning office said.

"Further discussions are required to ensure that the maximum amount of affordable housing would be provided at an appropriate tenure mix."

This was welcome news to the Yard's founder, Saif Bonar.

"We had been eagerly anticipating the report," he said.

"As expected the mayor's office found that the development fell short of the targets for affordable housing and TFL also expressed concerns at the lack of plans relating to construction traffic, particularly the suggestion that HGV's could reverse out of Surrey Street onto the already congested high street in order to fulfil deliveries and removal of construction materials."

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However this news only delays the inevitable as Mr Bonar has previously confirmed the arts hub is looking to move to a different location nearby.

"While we acknowledge that in time the developers will produce a revised plan which will be acceptable to the mayor of London and Croydon Council, at this point we are happy for the brief reprieve given which gives us more time to secure new premises nearby," he said.

"It's important for Matthews Yard to trade for as long as possible from the current location as each month we trade we are able to repay more of the people in the local community who have loaned money to Matthews Yard over the years."