Plans to generate a "substantial sum" of cash for housing services by selling off a disused block in East Croydon have been revealed by Croydon Council.

Plans to sell the neglected Cherry Orchard Gardens - three blocks of 48 bedsits and flats located off Cherry Orchard Road - have been made following a decision that renovation would not be viable.

And an initial proposal made in 2004 to give the building to a housing association for affordable housing redevelopment was also scrapped when the council realised it would not generate any cash.

The council says the cash secured from the sale of the prime site close to East Croydon railway station will go towards improving existing council homes and funding other housing investment initiatives.

It also stressed the plans will not result in a loss of housing in the area as the site is designated for residential use in Croydon's Unitary Development Plan.

This means a new development on the site would have to include both private and affordable housing, with shared ownership and key worker housing.

It is also expected that £2.3million of local authority grant will be freed up to fund other new affordable homes and shared ownership schemes elsewhere in the borough.

Councillor Dudley Mead, cabinet member for housing, said: "This is a common sense decision to get value for money for this prime site which is no longer needed.

"Our priority is to ensure all our council housing stock meets the decent homes standard by 2010 and the revenue received will be invested into achieving that aim."