HCA investment to kickstart 5,500-home Devon market town

The new community will provide 5,500 new homes as well as 5,000 new jobs, 83,000 square metres of employment space, new schools and community facilities. The development is expected to create around £1 billion of construction investment and to inject a further £2bn into the local economy.

Work on the scheme will be carried out by a development consortium led by Red Tree over a 15 year period. Planning permission for the development was granted in 2009 but progress has since stalled.

The funding is part of the HCA's £225m Local Infrastructure Fund, which the Government set up last year to create up to 50,000 homes across England. Under the scheme, investments are made as loans which are then repaid with interest as homes are completed and sold.

The fund has also provided investments into projects at Cranbrook near Exeter, Fairfield near Milton Keynes and Eastern Quarry near Ebbsfleet in Kent.

"This Government is determined to get Britain building again. That’s why we have carefully selected large, planned housing schemes that already have the support of local people, but need help to move forward," said Prisk in a statement.

"Sherford is the fourth site to receive support, and brings the total number of homes unlocked through the large sites programme to 41,000. Our intervention will also create thousands of jobs and inject billions of pounds of investment into the local economy," Prisk said.

"We have set aside considerable funding to assist large housing programmes like Sherford, and over the coming months we will continue looking at other schemes that would benefit from our support - that means more investment, more jobs for our young people and more affordable homes for families across the country," he added.

“The new community of Sherford is an incredibly important project, because it will go a long way towards meeting the significant need for new homes in Devon and Plymouth and provide a major boost for the economy," said HCA executive director for the south and south west Colin Molton. "It is a complex development, which has taken years to bring to this stage."

“This is welcome news as we have worked very hard with the local community and the developers for some time now to plan for a high quality new development," said South Hams District Council leader John Tucker.

"The current economic downturn however has created a great number of challenges in bringing the development forward. We now hope that the Government loan to the developers will kick start the scheme and lead to much needed homes in the South Hams and jobs for local people,” he said.