250 new social houses have been promised over the next year by voluntary housing association Circle Voluntary Housing Association. 

Circle has entered into a public-private investment arrangement worth €51m in a deal which has been described as being the first of its kind and also the largest private financing package to any approved housing body in the country.

The finance package was structured by the financial services group, Centrus, and is being funded by AIB. 

The package is a three part loan over a 30 year period that will include a revolving credit facility, a term loan and a working capital facility. 

Circle said the nature of the agreed package allows it to re-use the borrowed funds at any time over the period of the loan, providing a safeguard for ongoing speedy development of social housing.

The group says it intends to build 300 social houses a year from 2021. 

The initial tranche of 250 properties will be provided in urban centres including the Greater Dublin Area, Cork, Limerick, Waterford, Kildare and Galway.

John Hannigan, chief executive of Circle VHA, said this innovative public-private partnership approach is what is needed to solve the housing crisis.

"With our 30-year agreement and our existing structures, we estimate we will be able to bring approximately 300 social houses to the market each year," Mr Hannigan said. 

He said the finance solution was a result of combined-thinking and collaboration between Centrus, AIB and Circle VHA. 

"What we have achieved is a modern approach to financing that has never been accomplished in this sector before. It is a sustainable model which will benefit thousands of families over the course of many years due to the revolving nature of the credit, allowing us to expand and provide additional homes on an ongoing basis," he added.