HUNDREDS of homes could be built in some of the North-East's most deprived areas if £34m of investment gets the go-ahead.

Four of the region's leading housing providers will learn next month whether 40 projects are to be given the go-ahead by The Housing Corporation, which was set up by the Government.

The aim is to provide a mixture of housing, such as homes for rent and specialist housing for the elderly, over the next two to three years, often in areas where decaying properties are being demolished.

At least 500 homes will be built, with the consortium hoping to secure more Government funding.

Four groups - Enterprise 5, based in Newcastle, the Newcastle and Whitley Housing Trust, Endeavour Housing, of Stockton, and Tynedale Housing - are behind the bid.

Areas that would benefit include Darlington, Derwentside, Easington, Hambleton, Hartlepool, Middlesbrough, Redcar and Cleveland, South Tyneside, Stockton, Teesdale, Wear Valley, Newcastle, North Tyneside, and Sedgefield.

Keith Loraine, the chief executive of Enterprise 5, which is leading the consortium, said he hoped the project would make an impact on the North-East's housing needs.

He said: "We are excited by the opportunities for skill-sharing, joint procurement, economies of scale and forward-planning, and envisage that further benefits will be derived from this partnership in coming years."

Charlie Hughes, the chief executive of Endeavour Housing, said: "In the North-East, we are talking about older, obsolete stock, which people no longer want to live in, being replaced by a newer, modern product.

"If this kind of volume of investment is kept up year-on-year, we will really be making good progress with our regional housing strategy.

"It would not be the end of our housing problems, but would certainly be a step in the right direction."

In October, the Government announced that £170m would be given to housing groups in the North-East to provide decent, affordable properties.