Work is set to start later this year on the first houses to be built on the former Goodyear factory site in Wolverhampton – and they should be followed soon after by a controversial new supermarket, it was revealed today.

Regeneration specialist St Modwen said it was “pretty close” to exchanging contracts on the first five or six acres, with work on around 90 new homes due to start before the end of the year.

“There has been quite a lot of interest, which is good news for Wolverhampton,” said Bill Oliver, chief executive of West Midlands-base St Modwen, which is behind the redevelopment of the landmark site off the Stafford Road.

“There is also interest in the small food store part of the initial phase, and so hopefully that will not be far behind.” Budget store chain Aldi looks to be favourite to occupy the new 18,000 sq ft retail unit, which would sit inside a ‘neighbourhood centre’ which would be home to four other smaller units.

Supermarket giant Morrisons – which has outlets in Pendeford and Bilston – is objecting to the Aldi plans, claiming the north of Wolverhampton is “well provided for in terms of convenience stores”.

But city planners have been told that the scheme will be a catalyst for the continued regeneration of Wolverhampton, kickstarting the wider development of the Goodyear site by making it more commercially attractive to housebuilders. Plans for the 85-acre Goodyear site also include a new school to replace Oxley Primary and a 16-acre public park.

St Modwen also announced work had started on a major retail-led development behind Hednesford High Street, as it released its results for the year ended November 30 2009.

The company is also behind another major development in the region – the £85 million Bournville College scheme, being built at Longbridge in Birmingham, the former home of MG Rover.

The 250,000 sq ft college will be home to 10,000 students.

Mr Oliver said: “People living here in the region know that we are all suffering, and that this recession is tough. We have had a bad year, but we are well-placed – although we are not taking anything for granted.”

Businesses are having a hard time, but it’s not all about doom and gloom. There are some positive signs, with some of the engineering companies in the region doing reasonably well on the export front rather than at home.

“Things will be driven by how quickly the economy recovers, and if interest rates do go up it is going to be difficult,” added Mr Oliver. “We are hoping for a stable 2010, with things picking up the year after.”

St Modwen reported a loss for the year of £101.7 million, double that of 2008, most of it incurred in the first half of the year, since when market conditions and the company’s performance had “significantly improved”.