IPSWICH and Colchester are in line to receive millions of pounds of Government cash to provide affordable homes under plans announced by Deputy Prime Minister John Prescott yesterday.

IPSWICH and Colchester are in line to receive millions of pounds of Government cash to provide affordable homes under plans announced by Deputy Prime Minister John Prescott yesterday.

Over the next two years, £330million is to be pumped into housing across the six counties of the East of England, and it is expected that around 40% will be devoted to providing low cost homes.

Areas identified earlier this year by the East of England Regional Housing Board for the investment include Ipswich-Colchester, the London-Stansted-Cambridge M11 sub region, Milton Keynes, parts of Bedfordshire and Greater Norwich.

Other money will go towards housing renewal and the regeneration of land, with 5% directed towards black and minority ethnic communities.

The main reason for the cash injection is the widening of the affordability gap in the East of England. It is estimated that the region needs 7,000 homes a year for key workers, which does not take into account a backlog built up over the years when no investment was made in starter homes.

House prices are rising faster than incomes – the average price of a home is four times the average income in northern and coastal parts of the region and six times annual income nearer London.

Caroline Bowdler, chairman of the Regional Housing Board and Regional Director of the Government's East of England office, said: "The Board will be deciding in the next few months just where the new homes will be built and will encourage local landowners, developers, housing associations and local authorities to work closely together to ensure that the region delivers the right type of affordable housing, in the right location and in the required timescale to meet the strategic needs of the region.

"We will ensure better integration with the planning system and economic development and that the necessary infrastructure is in place."

The Deputy Prime Minister said the level of funding "will mean the East region can plan its investment towards meeting the recent levels of demand for affordable housing."