Work has begun on construction of the first homes in a new development in Eastleigh after the contractor was appointed.

Eastleigh Borough Council has approved £18.382 million to build the first 381 of 2,850 homes planned for the One Horton Heath project, to the west of the present Horton Heath.

The main increases to the overall programme cost include £16.3m, including £13.3m relating to the increased tender sum and the impact of £3m extra in reprofiled financing costs.

There is also an increased cost of £2.1m for additional electric vehicle charging infrastructure.

The new money, which comes on top of £485.4 million already approved, would take the total bill for the scheme to over £500 million.

With the tender approved for Surrey-based Wates Group Limited, work can now begin building homes at the Lower Acre.

Set across 310 acres, the development will feature a mix of new homes, open spaces, businesses and sports and leisure facilities.

As landowner and developer, Eastleigh Borough Council says it is embarking on delivering a different approach to development, focusing on community, innovation and sustainability.

Three bidders presented their interest in building the first 381 homes on Lower Acre land, but only one submitted the tender before the deadline on May 30.

The Lower Acre consists of eight parcels of land.

44 per cent of homes would be social rent, a reduction of 20 per cent compared to previous budgeted levels.

The monthly cost attributed to the £40.3m borrowed by the council for the Lower Acre is around £74k per month.

The report said that a delay in appointing a contractor could increase the monthly financing cost attributed to the Lower Acre to £86k per month.

The council has secured £20.8m of Homes England funding for the Local Authority Accelerated Construction grant programme for delivering 1,400 new homes using so-called modern methods of construction.

Cabinet members also approved the allocation of the developer contribution of just over £20m for the on-site primary school.

The council report said: “The award of the contract for the main contractor for the first 381 homes on the One Horton Heath development is a key milestone for the council”.