Surplus land at National Health Service sites around the country is to be sold off to housing associations or developers in an attempt to deliver thousands more affordable homes, growth and regeneration.

The announcement by Deputy Prime Minister John Prescott, and Health Secretary John Reid was made yesterday after an agreement was reached to transfer over 100 surplus NHS sites to the Office of the Deputy Prime Minister.

The land will be used to tackle housing shortages, including key worker housing, and to promote the regeneration of priority areas, as part of the £22 billion Sustainable Communities Plan.

The sites, equal to the size of Hammersmith and Fulham with a total area of 1650 hectares, are expected to provide more than 15,000 new homes, with at least 5,000 of them affordable, to maintain and create sustainable communities.

Money raised from the sale of the sites will be re-invested into the NHS to fund the expansion of front line services.

Health Secretary John Reid said, “This will benefit the NHS in two ways at the same time. An injection of cash, and a valuable contribution to the provision of key worker accommodation in the areas where it is needed most.”

Much of the surplus land is in the south of England where there is a real shortage of affordable housing for key workers such as nurses, police, and teachers.

English Partnerships (EP), the Government's national regeneration agency, will play a key role in the future plans for many of the sites. Other agencies, such as the Regional Development Agencies, local authorities and housing associations, will also be involved.