Watford Borough Council is considering setting up its own housing company so it can borrow money to build new homes in the district.

The joint venture with Watford Community Housing Trust would cost the council £12,500 to set up and could allow the council to sidestep the controversial Right to Buy scheme, which lets council tenants buy their properties.

The proposal was considered by the council's cabinet on Monday and received cross-party support.

Watford Community Housing Trust’s board is set to consider the proposal next week and a final decision will be made after this.

The move comes after a Home Truths report by the National Housing Federation said families would need an annual income of more than £67,540 to buy in Watford.

Just 440 of the 1749 new homes built in the last five years in the district are classed as affordable – which means they are available for less than the market rate.

A one-bedroom flat in the centre of Rickmansworth is up for sale at £250,000 while the average house price in the town is £295,489.

Elected Mayor of Watford Dorothy Thornhill said: “The housing crisis and the approaching changes to the law – particularly Right to Buy and the social housing rent cuts – mean that finding new ways of collaborative working are more important than ever to ensure that social housing will still exist in Watford.

“More than 50 councils across the country have already set up their own housing companies.

"Now we need to look at how this could benefit Watford and our residents.”

If approved, it is anticipated that the company would come into being on April 1 with project activity coming forward from July 2016.

No one at the council was available for comment at the time of going to press.