Labour and National’s landmark townhouse bill will be watered down again, reducing the maximum height of buildings allowed on sections under the bill.

Initially, the bill allowed height to boundary ratios of 6m at the side and rear boundaries, with a 60 degrees recessionary plane.

But concerns over sunlight loss saw the environment select committee recommend this be reduced to 5m as of last Thursday.

Housing Minister Megan Woods and Environment Minister David Parker then decided to reduce this ratio further, informing the committee on Friday they would like to have this ratio trimmed to 4m.

In a statement both Woods and Parker said that modelling by PwC showed these changes would not dramatically reduce the number of houses allowed under the bill. PwC had initially modelled between 48,200 and 105,500 houses would be delivered thanks to the new legislation.

“We listened to what submitters to the select committee had to say and sought advice on what the impact of lowering the height of buildings in relation to boundary would be on yield of housing,” the ministers said, in a statement.

“Modelling by PWC and officials on how a change of the rule to 4m + 60 degrees recessionary plane, suggested it would have a minimal effect on the number of new homes built.

“We told the committee chair on Friday that we would change the rule. This is a pragmatic response to allay concerns about the impact of new housing on neighbouring properties and is lower than the select committee recommendation of 5m (and 2m lower than the original 6m proposed in the bill),” the ministers said.

National Party housing spokeswoman Nicola Willis, who was part of the team that negotiated the original bill, said she would back the reduction.

The bill is set down for second reading on Tuesday.

After some speculation that widespread umbrage from suburban National MPs could see the party renege on the bipartisan agreement behind the bill, it now appears the bipartisan agreement will survive.

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