Six Stoke-on-Trent estates are to be transformed as part of a £177 million scheme to help meet a chronic shortage of council housing.

Families in Abbey Hulton, Bentilee, Blurton, Chell Heath and Fegg Hayes, Meir and Norton are to benefit from the private finance initiative, aimed at regenerating communities brick-by-brick.

It will involve building 729 new homes, with just under 500 of these earmarked for affordable rented accommodation. The rest will be for outright sale or shared ownership.

There are currently around 9,000 people on Stoke-on-Trent City Council’s housing waiting list and certain types of properties, such as those with four bedrooms, are very rare.

Some other existing homes are bedsits or in a poor state of repair so are lying empty or have a high turnover of tenants.

Now hundreds of these unfit homes could be demolished to make way for a mix of two, three and four-bedroom houses. The PFI scheme will also provide new specialist housing for older people and those with disabilities or special needs.

Residents will play a key role in deciding exactly where these homes are built, how they are designed and how other community facilities are improved.

Ideas include new multi-use centres where residents will be able to meet socially, get support in finding employment or training and access other services. There could also be more children’s play facilities, better streetlighting and CCTV.

The Government yesterday announced it had approved Stoke-on-Trent’s “expression of interest” document.

The council will now have to prepare an outline business case before it can access a share of the £1.7 billion housing cash being made available nationally.

City council leader Ross Irving said: “This announcement is fantastic news for the people of Stoke-on-Trent.

“To be one of just 10 council areas chosen for this major investment shows the confidence the Government has in our ability to manage and deliver major housing regeneration.

“There is a clear need for new social housing in Stoke-on-Trent and this scheme will provide much-needed new homes for people on the housing waiting list.”

The city council currently manages around 19,500 properties through its partnership with Kier. The new houses will be built by a private partner under the PFI scheme, but after a 25 or 30-year period will revert to full council ownership.

It is not yet known who tenants will be paying their rent to, but it could be a housing association or the council itself.

Stoke-on-Trent North MP Joan Walley today welcomed the announcement, saying: “This is going to help regenerate and secure the long-term future of our social housing estates.

“It’s going to mean residents will have a much greater choice of housing types and there will also be better community facilities.”

Chris Cotterell, aged 66, now spends much of his time chatting over cups of tea with his neighbours in Denham Gardens, Blurton, and feels his quality of life has dramatically improved.

His experience could provide a real insight into what it will be like for other tenants across the city once the new homes are built.

Mr Cotterell lived in a one-bedroom bungalow in Gainsborough Road until last year. He and other older people from the area then moved en masse to the 17 new bungalows in the cul-de-sac at Denham Gardens.

“The old place was very cold and very damp and had condensation running down the windows,” he said.

“There was also no privacy because both the front and back were overlooked. Here, the backs are nice and private and I feel safe and secure. It’s just a nicer environment.”

Inside his bungalow, which he rents from Aspire Housing, he has had an input into the colour schemes and other design features.

“The bills are also well below what they used to be,” he said.

“People aren’t shut away in their boxes. They come outside and get to know their neighbours. We are a community now. We weren’t before.”

As well as approving the social housing bid, the Government confirmed RENEW North Staffordshire will be getting a further £3.8 million for its housing regeneration work this year. This is money which was held back until Whitehall had a satisfactory report on Renew’s work to date.

Rob Flello, MP for Stoke-on-Trent South, said: “There are a huge number of people on the waiting list around here and yesterday’s announcements mean a massive move forward.”

He said building the new houses would also provide a big boost to the construction industry and provide more jobs.

Building work is expected to start in 2012 or 2013 and last for around five years.