Development of 350 new homes at Sheepfolds moves closer thanks to £28m funding boost
The development could eventually have over 450 new homes
The construction of over 350 new homes on the city’s Riverside development has moved a step closer after Homes England, the government’s housing and regeneration agency, has backed the Sheepfolds neighbourhood through a £27.7 million investment.
The investment will help transform the former industrial site with a prominent riverside location.
The new funding, made through the agency’s Brownfield Infrastructure Land (BIL) Fund, will unlock the delivery of over 350 new homes at Sheepfolds – set to be the largest residential neighbourhood in Riverside Sunderland, with £10 million already invested from the North East Mayor.
The investment will support the construction of “high-quality infrastructure” including new roads, utilities and active travel routes to enhance connectivity between the city centre and surrounding communities.
Cllr Chris Eynon, Leader of Sunderland City Council, said: “We’re delighted to have secured funding from Homes England that will enable delivery of infrastructure and public realm that will accelerate housing delivery, improve connectivity, and ensure the neighbourhood is fully integrated with the city centre and surrounding communities.
“This investment marks another major milestone in delivering our vision for Riverside Sunderland. Sheepfolds is a key part of our plans to create new homes, jobs and opportunities in the heart of the city, and its connectivity to the former Vaux site, through to the high street and wider city centre means this is a vital next step in our journey to regenerate the whole urban heart of Sunderland.”
The work will build on the success of the Keel Crossing pedestrian footbridge, opened last year which was also partly funded by Homes England.
Tom Bridges, Executive Regional Director, North East, Yorkshire and the Humber, at Homes England, said: "Our long-standing partnership with the North East Mayoral Strategic Authority and Sunderland City Council continues to deliver real results for local people.
“This latest funding will enable delivery of the next phase of Riverside Sunderland, one of the most exciting and impressive regeneration projects in England.
“It will unlock much-needed new homes on brownfield land in the heart of Sunderland and create a vibrant new neighbourhood that connects people to their city centre.
“We’re building on the great momentum already created by the delivery of Keel Crossing and our wider regeneration efforts throughout the city, and we look forward to continuing to work with partners to transform the city centre for the people of Sunderland.”
Last month (July), construction company Vistry lodged a planning application for an additional 102 new homes to be built on the Sheepfolds development to the south of the new Housing Innovation and Construction Skills Academy, which would bring the total number of new houses up to over 450.
Initial plans for up to 600 homes, commercial units and community spaces received a formal objection from Sunderland AFC following concerns from Kyril Louis-Dreyfus about the potential “catastrophic operational consequences” for the club and the Stadium of Light, including potential expansion of the ground.
Earlier this year (2026), the club and council subsequently confirmed a revised plan for around 450 homes had been submitted, which alleviated the club’s previous concerns thanks to a larger “buffer zone” around the stadium.
The new neighbourhood supports Sunderland City Council's wider ambition to deliver over 1,000 new homes across the city centre and forms part of the Riverside Sunderland Creative Mayoral Development Zone, playing a pivotal role in repopulating and reenergising the city.
North East Mayor, Kim McGuinness, said: “We're committed to building 15,000 new social and affordable homes right across the region in the next decade.
"We're transforming derelict sites, like the one at Sheepfolds, with a vibrant new neighbourhood. It's just shows that we're ambitious with our plans for Sunderland whether that's backing Crown Works Studios, regenerating the city centre or building new affordable homes."