Work on a major housing development in a Herefordshire town has stopped after the company building the homes collapsed into administration.

Jehu Group, the main contractor for the homes being built behind the Full Pitcher pub in New Street, Ledbury, has ceased trading and Begbies Traynor has been appointed as administrators.

Housing association Connexus, which is behind the development, was awarded more than £3m in grant funding from Homes England for the 93 new affordable homes.

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Construction work got under way early this year after a shortage of building materials hampered previous efforts to develop the site.

The scheme was due to be completed in summer 2023 but Connexus will now have to find a new contractor to continue the work started by Jehu Group.

Amanda Knowles, head of development at Connexus said: “Connexus remains committed to developing new affordable homes for local people in the area.

“We are working with the administrators and appraising various options which will enable us to complete construction at the Full Pitcher site.”

Huw Powell, managing partner at Begbies Traynor in South Wales, said: “This situation underlines the crushing impact of the current inflationary environment on an established and successful business.

More than 100 redundancies as Jehu Group ceases trading

“Pre-pandemic, the group was highly profitable and by 2019 had almost £7million in net assets. It continued to win high profile projects and was an award-winning business.

“However, delays in completing projects caused by the pandemic and subsequent cost increases caused a severe cash-flow crisis that it could not recover from, despite support from key stakeholders.”

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More than 100 employees across Jehu Group, Jehu Project Services Limited and Waterstone Homes Limited have been made redundant, and work has stopped on 17 construction and development projects for local authorities and registered social landlords, including at the Full Pitcher.

The directors of the companies, Marc and Simon Jehu, said: “This is a truly devastating day for the business started by our grandfather over 85 years ago.

“Every possible option to keep the business alive has been completely exhausted and it is with desolate hearts that we find ourselves with no choice but to cease trading.

“We did everything possible to avoid closure, but we were fighting a battle that simply couldn’t be won due to the successive economic shocks of the past couple of years.”