The chancellor announced initiatives to stimulate house-building in the Autumn Statement.

Philip Hammond said: “In October, my Right Honourable Friend, the Communities Secretary launched the £3 billion Home Builders’ Fund, to unlock over 200,000 homes and up to £2 billion to accelerate construction on public sector land. But we must go further still.

“The challenge of delivering the housing we so desperately need in the places where it is currently least affordable is not a new one, but the effect of unaffordable housing on our nation’s productivity makes it an urgent one.”

He added: “So we will focus government infrastructure investment to unlock land for housing. With a new £2.3 billion Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in areas of high demand.

“And, to provide affordable housing that supports a wide range of need, we will invest a further £1.4 billion to deliver 40,000 additional affordable homes.

“And we will relax restrictions on government grant to allow a wider range of housing-types.

“I can also announce a large-scale regional pilot of Right to Buy for Housing Association tenants. And continued support for home ownership through the Help to Buy: Equity Loan scheme and the Help to Buy ISA.”

Stephen Smith, director of Legal & General Housing Partnerships, said: “The Chancellor’s pledge to add another £1.4bn into the housing market is desperately needed and will be welcomed by both the industry and hopeful first time buyers across the nation. This injection of capital is aimed at delivering 40,000 new affordable homes in England. Due to the serious shortage of properties, our country’s housing market has become increasingly selective and exclusive, pricing out many buyers who are unable to meet these overwhelming financial demands.

“This decision is a welcome first step in rebuilding the fragmented sector. However, this act alone will not solve our housing crisis. The additional funding will hopefully go some way towards helping the government achieve its build target of one million affordable homes by 2020 and will encourage a collaborative effort from the government and house building associations.”