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Developer Persimmon has lodged plans for the first 100 homes to be built on farmland.
Ovinia Close, comprising a selection of two, three and four-bedroom homes, is the first wave of 700 houses earmarked for the plot along the Lower Road at Minster at the junction with Barton Hill Drive.
Swale councillors initially turned down outline permission for the development but lost on appeal and had to pay costs.
The original scheme would have gone hand-in-hand with rebuilding the Lower Road, a vital link to the eastern end of the Island, but planning delays means the work is no longer eligible for that funding.
Elouise Mitchell, planning manager for Persimmon South East, said: “We are incredibly proud of our plans for Barton Hill Drive.
"By working closely with Swale council and developing a bespoke design code, we’ve produced a really attractive and well-designed development for Minster.
"This will help preserve the character of the local community while also providing much-needed new homes for local people and first-time buyers.”
Persimmon says the development will create "new areas of green open space" and a new play park.
Each new resident will be given a "sustainable travel voucher" worth £350 which the company says will make public transport "cheaper and more accessible".
The company, which built the Sandpipers estate in Power Station Road, Sheerness East, says it will also be investing almost £400,000 in public services on the Island including schools, libraries and the NHS. It says almost half the homes it sells are to first-time buyers.
It is also behind a development at Watling Place, Newington, and is planning to build estates at Grovehurst Road, Kemsley, and Iwade on the mainland.
The Lower Road land was originally part of a submission by farmers SW Attwood & Partners.
After pushing through their plans for 700 homes, Stephen Attwood and his son James then announced in 2020 they wanted to double the number of homes to 1,500 and make them carbon neutral.
The scheme, dubbed Sheppey ZeroC, was to feature highly-insulated homes warmed by heat pumps and powered by solar panels.
The pair said it could lead to a new primary school and recreational centre, a dedicated road through the estate for buses and electric vehicles and a mobility hub for hiring out bikes and e-scooters and with electric vehicle charging points.