Wakefield Council announced on Monday that Strata Homes Ltd will start work on a planning application for 250 new homes in the area, which has been plagued by arson attacks and vandalism.

The remaining residents launched a last-ditch legal challenge to save their homes after the council slapped a compulsory purchase order on the estate last December.

The council says it is offering a relocation package of up to £50,000 on top of property values for those who do not want to move into the new homes.

Adrian Cottingham, of Girnhill Lane, said: "We are quite willing to work with the developer and the council as long as we get a house for a house.

"If not, we will get the legal process moving and will fight for a fair deal.

"My property is mine, I have no mortgage. It has been valued as being worth £40,000, which is ridiculous, and the council have offered us a £35,000 loan – part of the £50,000 – which would give them a share in any new home I buy. That's not good enough.

"I had not been informed of the developer until I was contacted by the Express, which I find shocking and disgusting."

Andy Wallhead, corporate director for regeneration, said priority for new homes would be given to the remaining households.

He added: "We hope residents will consider this. If not, we will continue to support them in finding a home elsewhere."

Featherstone MP Jon Trickett added: "I have been pressing hard on a series of fronts, including Girnhill Lane. Now we have a preferred developer, it's time for the talking to be over and for the action to start.

"I am hopeful that in the coming weeks we will see announcements in relation to a supermarket coming to the town, training for local people to help them get jobs, the precinct and investment in Featherstone Community College.

"Following my debate in the House of Commons – where I raised the regeneration of Featherstone – I hope there will be a significant amount of government money made available for the ongoing regeneration and development needs of the town."