Punch Taverns has lost an appeal against West Lindsey District Council’s refusal to grant it planning permission for 10 homes in Waddingham.
The company had sought to build the homes with parking at the back of the Marquis of Granby in High Street. A further 12 parking spaces would remain for the pub.
The Planning Inspectorate noted the proposal, declined by WLDC, would help maintain and support businesses in the village and two planned affordable homes would help local people stay in the area.
But the judgement also said the closeness of the planned homes to the pub meant its occupants would suffer poor standards of amenity.
The development would also harm a recognised Habitat of Principal Importance and with Anglo-Saxon pottery found nearby, adversely affect heritage assets of archaeological interest.
Future occupants would also need to use cars to travel to work. Thus, on balance, the appeal was dismissed.