A group of Muswell Hill residents are downsizing from their large family homes into a new communal housing scheme on the site of St Luke’s Hospital.

The former mental health hospital in Woodside Avenue is to be converted into 200 homes in a deal worth �26million.

Around 35 of the new homes will be reserved for residents who want to live “in a mutually supportive community” with some shared facilities, including a communal dining room and garden.

Architect Ruth Schamrothm plans to move from her five bedroom Edwardian house in Muswell Hill Road, to the new development with her husband, two children and pet tabby cat.

The 52-year-old said: “There were around 30 of us who were interested in the site, but with prices running amok we knew we would have to find a partner.

“A lot of people said to us that they can imagine moving to a co-housing block in ten years time but not now, but it is an opportunity. It means in 20 years time when other people are selling up their homes we will be able to stay in ours.”

She is among a group of residents who formed the North London Sustainable Housing Partnership last year after Camden and Islington NHS Trust announced plans to sell the St Luke’s Hospital site.

They approached Hanover housing association, which has been involved in helping other communities set up co-housing schemes, and encouraged them to bid for the site.

The housing association has agreed that around 30 flats will be reserved for the co-housing project, where residents will share a communal dining room, garden and other facilities.

Mrs Schamrothm admitted her sons, Alexander, 18, an A-level pupil at Fortismere School, and Louis, 20, a university student, have some reservations about the move.

But she insisted the project was good for the community, as it frees up larger houses for new families to move to the area while providing participants in the scheme with a fulfilling, communal existence.

“My sons are a bit upset that we are leaving our lovely home and garden,” she said. “But we are moving in with a number of like minded people.

“We will be in a street where we can know our neighbours. That is what we are hoping to create.”

Hanover chief executive Bruce Moore said: “We recognised that the St Luke’s site provided an ideal opportunity to realise the plans of this group and confirm our commitment to the local community”

Muswell Hill councillor Gail Engert welcomed the sale, but said residents would need to examine the planning application, which is expected in September.