The homes bid was based on a survey of housing need in the area

The development of two and three bedroom homes at Crickhowell, near Abergavenny, could begin by 2006.

The plans have been submitted by Gwerin housing association, backed by local community councils, aimed at people who have a connection with the area.

Since the scheme in north Monmouthshire and Powys started in 2004, two similar projects have begun in north Wales.

Community councils in Crucorney, Hay, Llangors, Llanover, Talybont-on-Usk and Llangynidr have taken part in the project to assess local housing needs.

A plot of land which was considered suitable was then identified and the blueprints drawn up in conjunction with Powys County Council and Gwerin Housing association.

Rural Housing Enabler, Rhidian Jones, runs the pilot project. He said: "This is the first of what we hope will be many such applications."

Similar schemes

He said the occupancy of any properties which are built through the project would be restricted to locals only and would remain in the control of the housing association.

Further surveys are planned for other areas, including Cwmdu, Bwlch, Llanfrynach, Talgarth and Llanelly.

The project is funded and managed by a partnership of organisations, including the Welsh Assembly Government, Monmouthshire and Powys county councils, the Welsh Federation of Housing Associations, the Brecon Beacons National Park Authority and five housing associations.

Similar schemes are underway in Gwynedd and Conwy and Denbighshire.