A Stamford Hill housing association is to give away land worth more than £1.5 million to special needs school Side by Side for new premises, with the proviso that planning permission is obtained for flats on top of the property.

The school has wanted to relocate for some years and has been looking forward to moving to the Agudas Israel Housing Association's £10 million Avigdor Mews housing development, built on the site of the former Avigdor school. But AIHA chief executive Ita Symons says the school can no longer afford to purchase its share of the site.

In consequence, she had offered the school the land, on the understanding that Side by Side meets the construction costs, and that Hackney Council gives consent for the building to incorporate housing for up to 16 Jewish families. The cost of the new building is estimated at £4 million.

Ms Symons said that Hackney Council had been supportive of the plan to build the school and more flats on the site. But she added: "I hope there is the stomach to see it through."

There are currently more than 20 flats in Avigdor Mews, which have been occupied since 2009.

The development caused disquiet among local residents who claimed it would block out their natural light.

There have since been problems between Avigdor Mews residents and those of next-door block, Arbor Court, with complaints about disturbances.

In a letter to the council seen by the JC, Arbor Court residents complain of constant car hooting, children shouting, and general singing and chanting late at night. The singing is described as "like a cats' chorus".

Rachel Fairbairn of Hackney's community safety team met this week with David Moreland from Agudas Israel and representatives of the blocks.

"Car horns are the biggest annoyance," said one Arbor Court resident. "The whole tone of the area has changed since the flats were built."

A strictly Orthodox Avigdor Mews resident said people living there had been made to feel unwelcome. "It's horrible to think your neighbours hate you. They complain about the sound of children, but everyone in this block has at least five children. Children will play and sing - it's a nice sound to hear."