A property developer is planning to sue a charity which runs an addicts' hostel after thousands of pounds were wiped off the value of his home.

Mark Newman appealed to the Valuation Office after refusing to pay his council tax in protest at the “wet shelter” next door.

Government valuers mounted an investigation and agreed to downgrade the tax banding of the property from category F to E, meaning Mr Newman will have to pay less council tax because his home is not worth as much as was previously thought.

In a letter the valuation officer stated: “I have completed my review of your property and have come to the conclusion that the current council tax banding is incorrect and needs to be reduced.”

Mr Newman, of Church Walk, Worthing, said: “This represents a decrease in the value of our home of £90,000 at today's values.

“The estate agent who tried to sell our home in 2007, prior to the credit crunch, estimated that we would have to offer a whopping £150,000 discount to try to attract a buyer.”

Mr Newman claimed his house was actually worthless because of disturbances at the Selden Road hostel, called Delaney House, which takes in drink and drug addicts.

Worthing Churches Homeless Projects (WCHP), which runs the shelter, declined to comment other than to say: “This is a private matter between Mr Newman and the local authority and valuation officer.”

Mr Newman said: “Being band E saves us £315 a year but I will probably appeal as I consider a discount of £26.25 a month for having to live with WCHP as derisory.

“This reduction will be backdated to 2006, to the time when the former retirement home shut, and the drug addicts and alcoholics moved in.

“It is my intention to seek damages from WCHP, and possibly Worthing Borough Council, for in excess of £100,000.

“Now that the valuation office has supported the argument that WCHP has caused me a substantial loss, and together with the council has taken away my right to move house at the market rate like any other resident, I shall need to be compensated.”

Earlier this year The Argus revealed that East Worthing and Shoreham MP Tim Loughton had quit as patron of the charity amid concerns about the way Delaney House was being run.

Mr Loughton initially backed the shelter when it opened but later resigned after WCHP scrapped a residents' liaison committee.

He also feared that an agreed limit of 12 people in Delaney House had been breached because the charity needed to raise more money.

A spokeswoman for the charity said previously: “We have a very good relationship with the vast majority of our neighbours.

“It is true we increased the number of places at Delaney House. This was due to the fact that we have a constant waiting list for people needing to access the services as well as ensuring the financial viability of the project.”