A new council-owned housing company offering affordable rents is to be set up in Camden.

Camden Living will provide 'intermediate' rental housing for residents who can't afford private rents but who don't qualify for the housing register.

It will also be an extra source of income for the council, the sole shareholder, thanks to the capital growth of assets under the company's control.

Camden Living's first acquisition will be 52 flats from the Maiden Lane Community Investment Programme to let on flexible tenancies, an intermediate rent that is affordable.

Cllr Sarah Hayward, leader of Camden Council described the decision to found the company, taken last night at a cabinet meeting, as an 'innovative' response to the housing crisis and Government cuts.

'London is facing one of its worst ever housing crises, compounded by severe government cuts and a Housing Bill that will only make the situation worse,' the councillor said.

'We're dedicated to fighting the Housing Bill but we're also responding to the situation it has created by using innovative ways to offer more affordable housing options for our residents.'

Cllr Hayward continued: 'We know that many people who are unable to afford sky high private rents are also ineligible to join the housing register for social housing.

'The creation of Camden Living can help to tackle this significant gap in affordability whilst also generating income for council services.'

The Maiden Lane Community Investment Programme flats are currently earmarked for shared ownership sale. Cllr Hayward, however, argues this would be out of reach for many residents.

'New shared ownership homes are becoming increasingly unaffordable to residents due to continued increases in market value and the huge deposits now needed,' she said.

'By acquiring homes earmarked for private sale through the Community Investment Programme and letting them for intermediate level rents we are widening the rental offer available to our residents.'