NEARLY 40 affordable homes for older people could be built on two former sheltered housing units.

Vela Group wants to build 38 apartments and bungalows on the sites of Oversteads House, in Ushaw Moor, and Brandon House, in Brandon.

Durham County Council agreed to close the two 1970s-built facilities in November 2010, despite outcry from their remaining 26 elderly residents.

Vela, which has been promised nearly £1.3m from the Homes and Communities Agency, wants to build 20 apartments and two bungalows on the Brandon site and 16 apartments in Ushaw Moor.

But the deal depends on the council handing over the land free of charge.

The authority’s cabinet will be asked to approve the transfer when it meets next Wednesday.

Councillor Clive Robson, the council’s cabinet member for housing, said: "Oversteads House and Brandon House struggled for a number of years with high management and maintenance costs and with demand for places low retaining the two schemes would have represented very poor value for money for the council.

"Transferring both schemes to a suitable housing provider will instead mean the sites can be redeveloped to create two modern, fit-for-purpose developments of affordable housing.

"In order for this to happen, we have to award the land at ‘nil’ cost but the need for affordable housing on the site far outweighs the price we could receive through the sale of land."

If cabinet agrees to the transfer, Vela Group would be expected to submit a detailed planning application by April and explain how it plans to create jobs and training opportunities through the work.

Durham County Council’s cabinet will meet at County Hall, Durham, on Wednesday, February 29, at 10am.