A £28.5 million deal to improve thousands of homes has been heralded “groundbreaking” by city chiefs.

After months of negotiating, Brighton and Hove City Council has signed a deal to transfer 499 of its homes to a separate “arms length” company known as Brighton and Hove Seaside Community Homes (BHSCH) for 40 years.

The money raised through Santander will improve thousands of homes as well as bring hundreds more back into use.

It was finally signed off last week.

John Regan, chairman of BHSCH, which is made up of councillors, tenants and independent members, said: “This is a fantastic moment and is testament to everyone involved in this new company.

“We have worked hard to reach this point and we're now able to improve the lives of many of the city's most vulnerable households - single people and families.

“With our partner Santander we will now invest millions into improving the city's housing and providing much needed homes.”

The decision to raise money through handing over properties to a charitable body was made after tenants rejected selling the stock to a housing association.

Council Leader Cllr Bill Randall said: “This is a groundbreaking deal that will mean those in desperate housing need, such as the disabled or those fleeing domestic violence, will be housed and council tenants will see their homes improved.

“Our priority is to improve our homes and ensure all council tenants have homes that meet modern standards.”