Kingston Council will build its first new housing for a generation, after receiving £800,000 from the Government towards the construction of eight semi-detached family homes in Old Malden.

The properties, which will be reserved for much-needed affordable housing, will be built on the site of the Yew Tree House, a block of sheltered accommodation left empty after a 2008 report found it did not meet the needs of its residents.

In 2008, the council’s executive committee agreed to sell off the site to raise funds for housing investment.

However, following the collapse of the housing market, it instead applied for money from the £100m New Build programme, announced by Chancellor Alistair Darling last year.

Councillor Penny Shelton, executive member of housing, told councillors on Tuesday, March 9, that the scheme was financially viable because, unlike existing council housing, the authority will retain all the rents and use them to fund £800,000 of borrowing to match the Government grant.

She said: “When finished, it will be the first new housing build by the council for a generation.

"It is a very visible sign of the Kingston commitment to providing new affordable homes in the borough and making the best use of the properties we have.”

The council expects to submit a planning application for the four two-bedroom houses and four four-bedroom houses in May this year, and for building to be complete by September 2011, ahead of the Government deadline of March 2012.