A £2.4m scheme to provide council houses for local people in a Pembrokeshire seaside village which has a high number of holiday and second homes has been backed.

At the September meeting of Pembrokeshire County Council’s Cabinet, members were asked to enter into a package deal arrangement for the purchase of 21 affordable homes, along with an option for four ‘intermediate’ affordable units on land at Sandyhill, Saundersfoot.

The 25 affordable units form part of a 2024 approved scheme for 71 homes through Persimmon Homes Ltd at the site, through a Section 106 legal agreement, with discussions with the council taking place since then.

Members were asked to enter into a package deal consisting of a ‘golden brick’ agreement of £301,967.82 for the land purchase, £1,207,871.30 for the construction phase of the 21 units, and a separate purchase contract and cost up to £896,000 for the four ‘intermediate’ units.

A report for members presented by Cabinet Member for Housing Cllr Michelle Bateman said: “Pembrokeshire faces serious housing challenges, including a distinct shortage of affordable housing to meet local needs and high levels of homelessness associated with unaffordable private rentals and house prices.

“Pembrokeshire’s natural beauty means the county has high levels of second home ownership and combined with the significant number of holidays lets in coastal towns this has reduced the availability of housing for local people. This has resulted in long housing waiting lists with high numbers of households in homeless temporary accommodation and many households having limited chances of having their housing needs met.”

It said the current costs for the 21 units, made up of 12 one-bedroom flats, three three-bed houses and six two-bed houses, equates to an average of £71,897 per unit; the four intermediate properties, at 70 per cent of market value.

“At present, this gives an estimated total cost of £2,405,839 for 25 units so an average cost of £96,234 per unit,” the report said, adding: “It is anticipated that the purchases will span two-to-three financial years but this will partly be dependent on the progress of open market sales to progress site works to the later phases of the development.”

Cllr Bateman, who moved approval, told members the scheme for “21 council houses” and socially rented properties would “offer high quality accommodation for local people in an area with a high proportion of second homes and holiday accommodation”.

“The local member is fully supportive; these opportunities are part of a wider range of measures to increase the supply of affordable housing,” she added.

The proposal was supported by Leader Jon Harvey and Cabinet Member for Residents’ Services Cllr Rhys Sinnett, who said it was “a really good step forward in an area that’s particularly challenging in getting affordable living space for people”.

Cllr Harvey, who described the £71,00 per unit cost as “a very good deal that will go some way to alleviating housing pressures,” added: “We are looking at all sorts of ways of increasing the affordable housing stock; we are building our own council houses and acquiring houses, we are purchasing properties on the open market and using all sorts of funding to do that.”

Members unanimously backed the recommendations to enter into the deal, with delegated authority to the Head of Law and Governance to agree the final terms.