The Government today announced £53 million of investment in affordable homes for East Sussex over the next two years.

The Housing Corporation, which helps finance affordable homes schemes, will use the cash to build 940 new homes.

The news will be welcomed by many first-time buyers who have been priced out of the housing market.

House prices in East Sussex have risen 0.6 per cent compared with the national average of 0.5 per cent over the past month.

The Housing Corporation is expected to reveal where the new homes will be built next week once it has finalised the details.

But it confirmed some would be built in Brighton and Hove where there the housing shortage is at its worst.

Sheila Drew-Smith, Housing Corporation board member for the South-East, said: "Today we have reiterated our clear commitment to help meet the affordable housing needs and aspirations of East Sussex residents.

"Affordable homes have a vital role to play in communities, giving people the comfort and stability they need and helping to create truly successful and long-lasting communities.

"In particular, with a focus on affordable homes for rent, this investment will help alleviate homelessness, which has been a particular issue for the region."

The new homes will be a mix of affordable rent and low-cost home ownership.

Some of the money will provide new supported housing for the countys elderly and vulnerable residents.

The homes will be built to high design specifications and environmental standards higher than those for private sector homes.

This means six per cent less carbon dioxide emissions as well as savings on utility bills due to water, electricity and other energy-saving measures.

David Eastgate, chief executive officer of Hyde Housing Group, which manages homes across East Sussex, welcomed the announcement.

He said: "I am particularly pleased that a large proportion of the investment will provide social rented homes to assist in addressing the homelessness problems in the area."

The Housing Corporation received £3.3 billion to deliver 63,000 homes across England between 2004 and 2006.

Funding for 2006-08 has risen by 15 per cent to £3.9 billion for a further 84,000 homes.