500 homes planned under public land scheme

Housing Minister John Healey said three sites of Government-owned land have been made available to housebuilders under the Public Land Initiative.

The scheme aims to increase the number of homes built and reduce the cost of building them. It is expected to lead to just 1,250 homes being built overall, although many will be used as "affordable housing".

The scheme removes many of the upfront risks and costs incurred by housebuilders when they develop a site because contractors only pay for the land once the properties have been sold.

In exchange for reduced risk, the developers must take a smaller profit.

The Government hopes the scheme will also encourage construction firms which have not previously been housebuilders to enter the sector, increasing competition in the industry.

The first three sites are: Bentley in Doncaster, where 178 homes are planned; Kingsmead South in Milton Keynes, 200 homes planned; and East Bank in Ouseburn, Newcastle upon Tyne, between 90 and 100 town houses and "apartments" planned.

Two of the sites are owned by the Homes and Communities Agency, with the third jointly owned by regional development agency One North East and Newcastle City Council.

The Government is calling for other public bodies to follow suit and identify land that can be freed up for house-building.

It is estimated there is enough public land in England alone to build nearly 300,000 homes, including council-owned land and former NHS, transport, military and school sites.