The funding, announced by Northampton Borough Council, is partly aimed at providing cheaper homes to attract key workers to the area.

The government, council and Housing Corporation are together allocating funds to 10 housing associations to produce 592 affordable homes.

Of these, 36 homes will for sale, 307 for rent and 249 for shared ownership.

In addition there will be housing reserved for key workers who are unable to afford a home on the open market.

'House prices have spiralled'

The new developments will be located on mainly brownfield sites within the town centre and the surrounding wards of St James, Spring Boroughs, Spencer, Castle, Abington, Billing and Thorplands.

Some development may also take place in outlying districts, including Wootton and Upton.

Councillor David Palethorpe, Northampton Borough Council cabinet member responsible for housing, said: "In recent years house prices in Northampton have spiralled.

"These new homes will make a significant difference by providing affordable homes for people on low incomes who are currently homeless or on the council's housing waiting list.

"The council will continue to work with housing associations and the Housing Corporation to increase further the supply and choice of affordable homes for the residents of the town."