Leggo Ltd applied to change the use of the properties, at Standford Bridge, northwest of Newport.
Parish councillors expressed concerns that fast-moving traffic on the nearby main road posed a safety risk, but a report from Telford & Wrekin Council planners said this was not the reason for refusing permission.
Instead, they said, the new homes would have been “isolated” and cut off from “services and infrastructure”.
Standford House, despite being closed, is currently registered as a care home, while the smaller Standford Lodge is classed as staff accommodation.
Leggo, a Staffordshire-based real estate company, applied to change them into a “family home” and “starter home” respectively.
Application documents submitted by director Terry Blamire say: “Standford Villa was originally a care home until it was deemed unsuitable and a new care home was built in the grounds.
“This building was then used as an ancillary building until the new home was completed in 2014, after which time it was unused.”
Chetwynd Parish Council minutes say its members discussed the proposals and were concerned about the 1.25-acre combined site’s proximity to the A41 Chester Road, and “what is already a particularly dangerous junction”.
“There are concerns the access onto the A41 from Standford Villa represents a major road safety hazard,” the document says.
“As it stands, the junction is not clearly signposted.”
The planners’ appraisal covering the Standford Villa portion of the application said the highways department raised “significant concern” about the use of an access driveway that led directly onto the from the A41.
It was previously overgrown and unused, they noted, but “the applicant has cleared the vegetation, re-opened the metal gates and laid a gravel surface to use as an access for the proposed dwelling”.
Planners noted the highways officer’s concern that northbound drivers on the A41 might be tempted to cut across the southbound side’s right-turn lane to get in.
This, on balance, was not a reason for refusal in itself, they said, but added: “An alternative access should be provided by the applicant, should permission ever be granted on this site”.
Reports covering both Standford Villa and Standford Lodge said the site is “in an area which is not considered appropriate for new residential development due to lack of services and infrastructure” and, if approved, the plans “would result in a new dwelling in an isolated, rural location”.