Planners have approved proposals to demolish a well-known Suffolk auction house and replace it with new homes - despite concerns from highways officials.

Diamond Mills wants to knock down its hall – which has stood in Orwell Road, Felixstowe, since the 1950s – and build seven new homes on the site.

It is the last auction house in the town - the other, run by Bannisters, closed some years ago.

Suffolk County Council highways is unhappy with the homes plan for the Diamond Mills site. It says eight parking spaces for seven four-bed homes is not enough - and 23 should be provided.

It fears there will be "unsafe or obstructive parking on the surrounding highway network".

But East Suffolk Council planning case officer Grant Heal said a previous scheme for the site of nine two-bed flats and three retail units had been approved with only eight parking spaces when 28 should have been required.

He said: "Further, while it is accepted that the site is situated within an area of high demand for on-street parking, the site is otherwise sustainably located within the town centre which provides access to a number of services, facilities, alternative transport options (i.e. bus and train) and public car parks within walking distance."

The plans are for outline permission but show proposed semi-detached and terraced homes fronting onto Leopold Road and Orwell Road.

Diamond Mills, an estate agent, valuers and auctioneers based in Hamilton Road, said the previously approved project had failed to secure a developer.

Despite extensive marketing over the past two years – and even dropping the price from £825,000 to £700,000 – there has been a lack of interest, with the commercial element proving the deterrent.

Phil Cobbold Planning Ltd, on behalf of Diamond Mills, said: “There is no demand for the commercial element of the approved scheme.

“This new scheme which proposes solely residential redevelopment of the site has been the subject of positive pre-application discussions with the council earlier this year.”

A marketing statement from Diamond Mills said: “Developers are not interested in retail units in numbers. Demand was already very weak before Covid and it is highly unlikely to change in the short to medium term.

“However, the position is completely different with regard to the demand for terraced and semi-detached houses. There is a very strong demand for residential town houses as recent sales evidence has confirmed.”