The Homes and Communities Agency (HCA) and CALA Homes (Midlands) have exchanged contracts to progress the development of 112 new homes at the Royal Shrewsbury Hospital South site.

The deal, subject to planning approval, sees the national housing and regeneration agency and the award winning housebuilder working in conjunction to bring forward new homes on the 7.89 acre brownfield site.

CALA Homes (Midlands) will apply for detailed planning permission to build 112 one-, two-, three-, four- and five-bedroom homes on the site, which is located within the prime established residential area of Copthorne, on the sought after western edge of Shrewsbury.

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The application also provides for 32 of the homes as affordable, as well as significant public open space incorporating a children's play area.

Provided permission is granted, CALA Homes plans to start building on site in the middle of 2010, with the first new homes ready for occupation in early 2011.

Since acquiring the site through its Hospital Sites Programme, the HCA has commissioned the land for development by carrying out demolition work and part-funding access road works.

The decision by CALA Homes to purchase the site from the HCA, for an undisclosed sum, comes on the back of increasing sales across all of its housing developments in a significant vote of confidence in the future of the housing market, and in the strength of its brand and products.

Regional Director for the HCA West Midlands, Paul Spooner, said: "Through close partnership work with our development partner CALA Homes and the local authority we are delighted to support this high quality development that will help to address the local need for more affordable homes."

CALA Homes (Midlands) decision to purchase the land follows a strong performance, with sales running at more than one new home per week on each of its developments. In July it launched a new development at Summer Gardens in Wombourne in Staffordshire.

(CD/KMcA)