A homeless charity has made the shortlist for a £250,000 competition after putting forward proposals for a new garden city on the Hoo Peninsula.

Shelter's entry for the Wolfson Economics Prize says 150,000 people could eventually live on the sparsely populated headland, which is home to many protected bird species.

It says the project would initially get under way with a town called Stoke Harbour, which could house 35,000 to 48,000 people.

That could be delivered within 14 years, it says, with a larger cluster of towns and villages developing around it.

The peninsula has long been the focus of major development plans, with the Airports Commission investigating the viability of building a four-runway hub airport on the Isle of Grain.

The plans were put forward as a response to the perceived shortage of affordable housing in the area.

New research by the charity shows fewer than 14 out of every 100 homes for sale in Medway are affordable for ordinary families hoping to buy their first home.

"Although it is only theoretical, we believe that a new garden city in Medway has the potential to offer the existing community genuinely affordable homes for their children, as well as new schools, parks, jobs, transport links and more to benefit the whole area..." Shelter's Campbell Robb

Shelter’s chief executive Campbell Robb said: “Creating new garden cities is an essential step towards building the homes we need.

“Our model proves that with the right innovation it is absolutely possible to build new settlements with plenty of genuinely affordable homes.

"Although it is only theoretical, we believe that a new garden city in Medway has the potential to offer the existing community genuinely affordable homes for their children, as well as new schools, parks, jobs, transport links and more to benefit the whole area.

“Soaring prices and years of rock-bottom house building have pushed the housing market to crisis point. We need to see urgent action to give hope to all those watching their dreams of a home of their own slip further out of reach.”

The entry is among five finalists out of 279 submissions for the award, which is second-biggest cash economics prize in the world, after the Nobel Prize.

Also shortlisted are plans by Chris Blundell, the development and regeneration director of Maidstone-based Golding Homes.

While he has not suggested a location, he put forward a financial model and cashflow analysis for garden cities, which he argues should house 30,000 to 40,000 people.

He said: “We need well designed and attractive homes which are fit for the modern age and future-proofed, in economically and socially sustainable communities.

"We need innovation and boldness in the planning and financing of these new communities to transform aspiration into reality."

Also among the finalists was town-planning consultancy Barton Willmore, which has been involved in planning residential schemes in Ebbsfleet, and has an office the Observatory near Swanscombe.

There was no mention of a 15,000 home garden city at Ebbsfleet mooted by Chancellor George Osborne during the Budget earlier this year.

Wolfson Prize founder Lord Wolfson – the cheif executive of retailer Next – said: "The creative energy and enthusiasm demonstrated by the 279 entrants to the 2014 Prize has been inspiring.

"Collectively, entries clearly demonstrate that garden cities are not just an opportunity to crack Britain’s housing crisis – they can also deliver better homes, gardens, infrastructure, schools hospitals, public spaces, jobs and economic growth.

"They are a real chance to improve quality of life for hundreds of thousands of people."

The winner will be announced in early autumn.