Persimmon Homes – which could be a candidate for the Muston Road project – recently declared it would not be starting work on scheduled new sites until the property market improves.

The company, which built the neighbouring Seadale gardens estate, said sales of new homes so far this year were down 24 per cent and blamed falling consumer confidence and an “unprecedented tightening of the mortgage market” which had left potential buyers struggling for loans.

Persimmon’s chief executive Mike Farley told a national newspaper: “I have been in the industry for 30 years and never seen anything like this shortage of funds.”

Experts have warned that if the trend continues, it could threaten the Government’s ambitious target of creating three million new homes by 2020.

Stuart Law, chief executive of market analysts Assetz, said Persimmon’s decision had come as no surprise. He said: “Persimmon is not the first and it will by no means be the last to announce a freeze on new starts. This is likely to be the first in a series of similar admissions across the industry.”

Scarborough Council forward planning officer Steve Wilson said the borough’s target of 11,800 new homes to be built between 2004 and 2026 was likely to be confirmed later this month when the authority’s regional spatial strategy is approved. He said: “We’ve got long-term targets. All the planning officers can do is approve applications – they can’t enforce the building of properties.

“For anything promoted within the spatial strategy, if there was a downturn in the economy and housebuilders weren’t coming in, there would have to be a rethink.”

But he said once the target was set, whether or not particular developments came to fruition would be for the market to decide.

So far, only preliminary architectural investigations have been carried out on the Muston Road site. Scarborough Council is expecting a full planning application from the developers later this year, which will include all the details about drainage, house design and so on.

Mr Wilson said: “If it doesn’t come in this year, that will be an indication that there may be a delay.”

Responding to rumours that it was the chosen housebuilder for the Filey site, a spokeswoman for Persimmon said the company neither owned nor had an interest in the site at the present time.

Nobody at NJW Developments – which submitted the outline application which was eventually approved on appeal – was available for comment.