This morning it released plans which it says shows it is committed to meeting the rising demand for social housing and cutting waiting lists, which recent research reveals now sit around 1.6 million families or 4 million people.
The funding is coming from existing budgets and will deliver around 5,500 homes over the next 18 months.
This is the first time local authorities with existing housing stock will be able to apply for grants to build housing alongside social landlords.
The government hopes this will help to bolster the house building industry and prepare the ground for economic recovery.
Fahim Antoniades, director of Quantum Mortgages, says: “ I seem to remember a pledge by the government some time ago to strengthen social housing.
“The previous pledge came befor the credit crunch and I’d be interested to know if this is on top of that or if it’s actually a drop from its initial commitment.”
Stewart Baseley, executive chairman of the Home Builders Federation, says: “Advancing investment in social and affordable housing will help maintain house building activity and capacity and a new shared equity scheme in which developers can be more directly involved is something the industry has previously shown its ability to implement successfully.
“However, we still also need action to tackle the current constraints on mortgage funding. We urge the government to continue to advance work on this issue as a matter of urgency.
“The case for such action remains to avoid undue damage to the wider economy and to safeguard housing industry capacity for when conditions improve.”