THE borough council has set the wheels in motion to build more affordable homes using developer contributions.

Test Valley Borough Council’s cabinet gave the green light for a new scheme to be launched between the authority and housing association Merlion.

To fund the scheme, the council will use contributions from other developments, awarded to the authority to put back into the community.

In a report to cabinet, members were told that it has become “increasingly difficult” to find companies to take on smaller affordable housing schemes leading to a reduced number of reasonably-priced homes so this scheme gave the council the opportunity to “improve and sustain affordable provision”.

The scheme will allow new buyers to purchase 65 to 75 per cent of a home and not have to pay rent on the rest of the home.

Councillor David Drew said: “What we are talking about is homes for people.”

Cllr Drew added that it is an “innovative approach” to increase the number of affordable homes in the borough.

Councillor Tony Ward said: “I think it is something we need to try. It is just another part of our programme to try and increase and sustain provision of affordable housing. It just seems worth a go.”

It is predicted that the scheme will also generate money for the council which would be used to support the delivery of other services as well as reinvesting in more affordable housing.

Members were told that investment made by the council will be returned with funds coming from Merlion and equity in the properties.

Merlion director Chris Williams said: “It will really help create an affordable home approach.

“We are delighted that Test Valley have agreed to go ahead.”

He added: “It is a relatively new scheme - less than a year old - and we are doing it in a relatively considered way as we don’t want to be swamped so we are only working with a few selected local authorities.”

Mr Williams said a meeting will be held with the authority to determine where the scheme is best placed to begin within the borough.

The scheme has received positive reaction from the leader of the Liberal Democrats Celia Dowden, who said shared equity homes was the right move.

She said: “I very much welcome the scheme. We can’t allow the market to do it.”