The outline application was for eight houses, two of which are to be three bed detached bungalows and six to be three bed two storey homes.
It had been brought in front of Powys County Council planning committee by a local councillor.
County councillor for Amanda Jenner justified the call in by saying that there were concerns about the site access from the trunk road A458 and sustainability of Middletown as a community.
Planning officer, Bryn Pryce, said that two of the eight houses would be for affordable homes.
Mr Pryce said: “This is over and above what would be needed.
“The Welsh Government has no concerns about the trunk road access to the site.”
Welshpool county councillor Phil Pritchard said: “I note the highways issues have been resolved and I’m a bit amused by them actually.
“If you’re coming out of that site you can probably see straight down the trunk road for three quarters of a mile to your left. And you can see for a good third of a mile to your right. So as an application this is one of the best I’ve ever seen in terms of views coming out of the site.
“I remember the Old Coal Yard and there must have been 30 to 40 lorries going in there every day in an eight hour period. There was never a problem.
“Since the coal yard closed it has to my mind been a blight at the edge of the village. This is a nice clean tidying up of the site and I fully support and recommend the application.”
The application was backed unanimously.