Work has already got underway on the site at Winterhay Lane and is set to be completed by January 2021.
The development includes 40 homes for rent, 25 allocated for shared ownership and 20 houses for rent-to-buy.
Homes England – the national housing and regeneration agency – is part-funding the project with a £2.8million grant as part of its aim to support the growth of local communities.
LiveWest Development Director Nathan Cronk said: “The new homes at Winterhay Lane provide a fantastic opportunity for local people to access great affordable homes and get a foot on the property ladder.
“There is a genuine choice of property – people can part rent, part buy their new home through the shared ownership scheme; for those that want to own a home in Ilminster but cannot afford it right now there is the option of rent-to-buy and there are affordable rented homes too.
“The scheme also sees LiveWest continue their successful partnership with Halsall, who has delivered great homes for us nearby in Martock recently and also in Barnstaple, Bovey Tracey, East Taphouse, Four Lanes and Willand in the last three years.”
Andy Corp, Managing Director at Halsall, said: “Following on from the start of the Livewest scheme at Morley Road where we’re on site in Bristol, we very much look forward to continuing to work closely with Livewest to help them to deliver their vision at Ilminster.
“Halsall has extensive experience of working on these developments across the South West and we will bring this experience with us as we embark upon this new contract in Somerset.
“We share a common understanding of collaborative working with Livewest which ensures quality and minimises risks; our focus is very much on working to deliver a predictable outcome and working alongside our great regional supply chain we anticipate providing another successful scheme in Somerset for Livewest.”
Rent to Buy is a government scheme set up to help people own their first home, even if they cannot afford the initial deposit.
The new properties are made available for first-time buyers to rent at 80% of market rental value for, typically, seven years before the occupier gets first refusal to buy it.
While paying 20% less in rent, the resident has the opportunity to build up a deposit to buy the property, or another one, after the initial rent period has elapsed. But there is no obligation to buy the property if the resident decides not to.
The scheme is available for households with an income below £80,000 and is available to first-time buyers or people who previously owned a home but are unable to buy one now.
“The average asking price for a home in South Somerset is now £240,717, nearly eleven times the average local salary, while private sector rents are almost a third of local workers’ take home pay,” said VaL Keitch, Leader of South Somerset District Council.
“Many people, particularly young families who support local services and businesses in the area, are being priced out of their community because housing is simply too expensive.
“We hope that these new affordable homes will go some way to tackling the housing shortage in the area and help more local people find a good quality home close to their friends, family and workplace, at a price they can truly afford.”
Versha Koria, Affordable Housing Senior Specialist for Homes England, said: “Homes England is committed to supporting developments that meet the needs of the local community so it’s great to see LiveWest providing a mix of affordable rent, rent-to-buy and shared ownership homes at Winterhay Lane. This will enable local people to access the right accommodation to suit their needs and home ownership aspirations.”