A landmark deal heralding more than £50m of new homes in the North-East and supporting nearly 800 jobs will be signed today.

Four of the region's social landlords are set to seal a partnership to build around 500 homes over three years.

Work will begin in earnest on more than 30 projects across the North-East, from Alnwick to Cleveland and Derwentside to North Tyneside.

The announcement comes as new figures last night showed home prices had risen by 10pc since January, 20pc since June last year, and the continuing boom in the region was closing the North-South divide.

With estate agents predicting further rises, experts have called on the Bank of England to increase interest rates to bring prices down to a more sustainable level.

Halifax estimates that if current levels of housebuilding continue, there will be a shortage of half a million homes in England by 2021.

The developers say that as well as tackling the shortage of affordable homes in the North-East, the new projects will be in attractive areas where people want to live.

The deal, involving Enterprise 5, Endeavour, Tynedale and Newcastle and Whitley housing associations, is being drawn-up by Newcastle law firm Dickinson Dees.

Spokesperson Emma Drysdale said: "The new partnership will be responsible for delivering the largest housing grant allocation in the North-East in 2004-6.

"The £29.2m funding deal that has been secured through the partnership's collaboration will enable around 500 new homes to be built over the next two to three years, across the North-East.

"A development programme of this size will have a significant impact on the region's construction industry.

"It is expected to help support around 785 construction jobs and the developers have pledged to use local contractors wherever possible to deliver the programme."

The new partnership is also involved in a number of high profile regeneration projects, including the Newcastle/Gateshead Pathfinder on the Walker Riverside.

Around £4m is set aside for the Tynedale area, where ex-council houses have been selling for more than £200,000.