A TOTAL of 65 affordable homes at a new York development have been funded thanks to a multi-million pound grant from a Government-funded housing body.

The Housing Corporation has put up an allocation of £3.2 million to help build the homes for rent and sale at the Derwenthorpe development, formerly known as New Osbaldwick.

The grant forms part of a £30.6 million cash injection for affordable housing schemes in North Yorkshire from the corporation, which is the agency responsible for funding and regulating housing associations.

The 65 homes at Derwenthorpe will form part of the much larger scheme being developed by the Joseph Rowntree Housing Trust.

The scheme, which the corporation expects to start taking shape in 2004, will eventually comprise about 540 homes, public open space and cycleways.

In North Yorkshire, the corporation's cash will aim to regenerate communities by tackling poor quality housing and improving neighbourhoods.

It also aims to provide affordable housing in areas suffering from a shortage, and in rural and market town areas, and to stem the rising tide of homelessness.

John Carleton, Housing Corporation director of investment and regeneration for the north of England, said: "I am delighted that this programme will deliver substantial affordable housing investment. We will now work with housing associations and our other partners to ensure well-designed homes are delivered to meet the long-term needs of communities in Yorkshire and the Humber."

Ian Atkinson, project manager for Derwenthorpe, said the allocation was "great news" for the scheme.

"This money gives us the opportunity to carry on with the project as we want to," he said. "The affordable housing element is vital, not only to provide proper housing but to meet the housing needs of York.

"This money will help us achieve those aims in Derwenthorpe."

The Evening Press reported on Monday that plans to make half of all the new homes built in York affordable could be fast-tracked to tackle the city's growing housing crisis.

Updated: 08:28 Wednesday, March 31, 2004