Cheshire East is to set up a housing fund so registered providers can buy open market properties to rent out as social homes.

The cash will come mainly from developer S106 contributions which were given for off-site affordable housing.

More than 12,000 people in the borough are currently on the social housing waiting list and nearly a quarter of those are high priority.

Karen Carsberg, head of housing, told the economy and growth committee this week at its meeting at Westfields: "The intention is to pool a number of contributions to create a fund in the region of £1.5m.

"The fund will be utilised to enable registered housing providers to purchase properties on the open market and let them at social rent levels.

"It will provide an opportunity to address the housing needs of some of those in the higher priority bands.

"Registered housing providers will be able to apply for funding up to 50 per cent of the market value of the property, up to a maximum of £150,000 and, for a larger four-bedroom property, up to £200,000."

She said the council was hoping to bring forward up to 15 homes in this way.

Cllr Linda Buchanan (Shavington, Lab) said she thought the proposal was 'brilliant'.

But she added: "My concern is that we're giving the money for housing associations to buy properties, how can we guarantee those housing associations then don't sell them on, and will we get that money back?

"I don't want to see us lose again that important resource for people who are in desperate need of homes."

Mrs Carsberg said social housing tenants have the right to buy, and this could not be restricted in this case.

But she said they would look at recycling the funding 'so if the property was sold, then that money would be recycled back into another affordable housing property'.

Cllr Janet Clowes (Wybunbury, Con) asked if empty properties could be bought up and was told this was one of the options.

Macclesfield councillor Fiona Wilson (Lab) proposed the housing fund be established and this was seconded by Congleton councillor David Brown (Con).

Cllr Wilson said: "This is a really important day for us, that we are developing this housing fund to invest the S106 monies that we've all sat through many planning applications and agreed to go towards affordable housing, which is absolutely vastly necessary in our area.

"I'm very pleased that this is coming to fruition."

The committee voted unanimously to set up the housing fund.