Developer Thornsett Group and Purley Baptist Church submitted plans in May 2016 for a development including a 17-storey tower, a total of 220 homes, a church and community and retail space.
The application proposes development on two neighbouring sites - a three-to-17 storey building on the first site comprising 114 homes, community and church space and a retail unit; with a three-to-eight storey building on the second site providing 106 homes.
The London Borough of Croydon had resolved to approve the development, but the application was called in by the secretary of state in April 2017.
Planning inspector David Nicholson subsequently recommended the plans be approved.
But a decision letter issued yesterday said that James Brokenshire had "serious concerns" about the proposed design of the tower.
The letter said Brokenshire disagreed with the inspector that, "for most of the scheme, the overall standard of design can be described as being sufficiently high to merit substantial weight".
The housing secretary also raised particular concerns about the height of the proposed tower, the design of the facades, and the prevalence of single aspect homes, the letter said.
While he acknowledged that the London Borough of Croydon’s local plan refers to the potential for a "new landmark of up to a maximum of 16 storeys", he noted that the proposed tower would exceed this height.
The letter added that Brokenshire found that the council's local plan policy was not site specific and did not provide justification for a 17-storey building in the proposed location.
The site’s location close to the listed Purley Library building was also cited in the letter among Brokenshire’s reasons for refusal.
"The presence of the tower would distract from the enjoyment of the facades and civic presence of the library, and cause harm to this heritage asset and this weighs against the proposal," the letter said.
Brokenshire gave "significant weight" to the provision of housing and the regeneration benefits to Purley District Centre, the letter said.
However, overall, it added that he found the scheme’s benefits were "insufficient to outbalance" the concerns.
The revised National Planning Policy Framework (NPPF) published in July introduced a heightened emphasis on design standards in new developments. Paragraph 124 of the document states: "The creation of high-quality buildings and places is fundamental to what the planning and development process should achieve."
Brokenshire's decision is one of several made against the advice of inspectors since he took on the housing brief in April 2018.
In July, he overruled an inspector to refuse plans for 120 homes in South Oxfordshire after giving "very significant weight" to a recently-made neighbourhood plan.
The following month he approved plans for 800 homes in Kent, despite an inspector's concerns about lack of affordable housing and the scheme's greenfield location.