Plans for a university quarter in Ipswich have saved a London-based developer whose hotel and homes scheme fell foul of the market.

Wharfside Regeneration, along with John Lyall Architects, has abandoned plans for a hotel and 52 homes in favour of 375 student rooms, at a cost of £16m. The development, which will be part of the new University Campus Suffolk, was recommended for approval by Ipswich council’s planning committee this week. The scheme will be built on two sites, for which the developer originally secured planning permission for 52 affordable housing units and an 81-room hotel.

Brian Tanner, director of Wharfside Regeneration, said: “We realised in August 2007 that the housing market was going sour. So we approached the principal of the new University Campus Suffolk, which is only 200m away from the Cranfield Mills site, with a proposal for student housing. The local authority wanted affordable housing as part of our section 106 agreement, but we are already providing a 2,500m2 dance centre under this agreement.”

Wharfside Regeneration plans to build the student accommodation through one of its partners, Fleming Construction, which makes modular housing in Cork. “The modular units could be shipped directly from Cork to Ipswich,” said Tanner.