OWNERS of second homes are paying for a scheme designed to generate more affordable housing across North Yorkshire.

Proposals accepted by the county council executive on Tuesday will use money raised through a reduction in council tax discount on second homes. This is expected to produce about 300 affordable homes over three years.

All seven district councils in North Yorkshire have cut the discount on second homes from 50pc to 10pc, producing additional revenue both for itself and the county.

County council chief executive Jeremy Walker and financial services director John Moore have now suggested ways in which that money can be used to help those seeking affordable accommodation, including the homeless.

Mr Walker told the executive that people in lower income groups suffered because demand for second homes pushed up prices.

"It is right to use resources from second home owners to provide affordable homes which will help more young people to stay in local communities and to help retain and attract key skills to areas of shortage where the housing market is pressured."

The executive was told that the total available to the county from the discount reduction in the current financial year was an estimated £1.9m, and it had been agreed that 80pc should be invested back in the districts where it was raised.

Mr Walker said: "Demand for affordable homes very substantially exceeds planned supply. To have any noticeable impact on the current state of affairs, a significant addition to supply would be needed."

The aim was to create a multi-million pound fund to be matched by the Housing Corporation, which would then bring in additional investment from housing associations.

Mr Walker said initial proposals by the Housing Corporation suggested that the North Yorkshire authorities working in partnership could set up a three-year rolling programme of building works.

Executive members accepted the proposal that, to help create the special fund, an annual investment of up to £400,000 should be made to support borrowing.

Mr Walker said the fund, when matched by grant and investment from the Housing Corporation and housing associations, could produce about 110 affordable homes a year over the next three years.

Options to be explored in the programme include new build, bringing empty properties back into use, creating flats above shops, making safe accommodation for young single people who are homeless and meeting the needs of the elderly.

Ways in which the funding can be used will be suggested by local partnerships working in consultation with county council area committees