Colchester Council is to build council homes for the first time in 20 years.

The authority says it has not been financially viable to build council homes since 1991.

But the growing social housing waiting list and the fact the council can borrow money for building has prompted bosses to act.

They plan to replace garages across the borough with council homes.

The council is set to apply for a £510,000 Government grant and borrow a further £2.164million to build 34 two and three-bedroom houses at six sites – in Berechurch, Shrub End, Stanway, Wivenhoe, Great Tey and Colchester’s Harbour ward.

The new homes will be run by Colchester Borough Homes.

Tim Young, councillor responsible for housing, admitted there was a risk involved because the “right to buy” scheme enabled tenants to buy council houses at a discount.

But he said it was the right time to start building again.

He added: “It’s been more cost-effective to put grants to housing associations to provide new social housing, rather than doing it ourselves.

“Now we think the opportunity has come for us to get back into the business of providing more houses ourselves, as well as working with housing associations.”

Council bosses will not reveal which sites are proposed until a public consultation is launched this summer.

Forthcoming changes are to allow the council to borrow £15million to either build new homes or upgrade existing ones.

Rent from the houses will be used to pay off the borrowing over 45 years.

Mr Young said: “It’s quite exciting in that we have now got some money to be able to put into new housing we can provide ourselves.

“These garage sites have become magnets for anti-social behaviour.

“Some of them are empty and I think people would rather see a nice sensitive development, rather than derelict garage sites.”

In addition to the six sites, Colchester Council already has permission to convert garages in Darwin Close, Blackheath, and Gloucester Avenue, Shrub End, into flats.

Kevin Bentley, leader of Colchester Council’s opposition Conservatives, said he was in favour of more affordable housing.

Colchester’s social housing waiting list has jumped by 50 per cent in a year. It rose from 4,251 in December 2009 to 6,118 in December 2010. About 14 per cent on the list are classified as high priority.