A new joint development fund has been approved by Preston City Council and Community Gateway Association for providing more affordable homes to Preston.
The fund between the two partners will be used to help secure Government funding to bring new homes in the city owned and managed by Community Gateway Association.
The development fund will be financed by changing the terms of the agreement between Preston City Council and Community Gateway Association when it was formed in 2005 after a housing stock of over 6,000 council homes were transferred to Community Gateway Association.
The stock transfer agreement included that if any commercial properties and land were to be sold on by CGA, then 50% of the proceeds from any sales would be given back to the council.
The council has now agreed that this money, as well as proceeds from future sales of commercial property and land covered by the original stock transfer agreement, should now be used to establish the new joint development fund.
Already, six sites covered by the agreement have the potential to be sold with a combined value of £260,000.
The council said funding from the new joint development fund will be used to secure match funding from the Government to build new affordable homes in Preston.
Cllr Peter Rankin, leader of Preston City Council, said: "This is great news for hard pressed families in Preston. There is a shortage of affordable homes in the city and by working together with Community Gateway Association, we can tackle this and enable more affordable housing to be built in Preston.
"This is a long term commitment and project to develop more affordable homes in the city. It will take time to fully realise the benefits and for the new homes to be built, but this is a fantastic way to help secure more affordable housing in Preston at a time when public money and resources are under so much pressure."