The Government hopes its fresh raft of measures will get an extra 70,000 homes built creating up to 140,000 construction jobs.
A central plank of the new ideas is a year-long relaxation of planning regulations.
This will see Section 106 agreements for affordable homes ripped up on stalled housing schemes, which are said to be stopping developers building 75,000 new homes.
As a sop to the social housing sector, the Government has found £300m in new cash to fund an extra 15,000 affordable homes.
It will also relax planning laws to make it easier for home owners to build large extensions up to 8m without planning and fast-track local authority planning.
The prime minister said: “The measures announced today show this Government is serious about rolling its sleeves up and doing it all it can to kick-start the economy.
“Some of the proposals are controversial; others have been a long time in coming.
“But along with our Housing Strategy, they provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation.
He added: “That means more investment around the county; more jobs for our people; and more young families able to realise their dreams and get on the housing ladder.”
Housing stimulus package
• Removing restrictions on house builders to help unlock 75,000 homes currently stalled due to sites. Developers who can prove that council’s costly affordable housing requirements make the project unviable will see them removed.
• New legislation for Government guarantees of up to £40bn worth of major infrastructure projects and up to £10bn of new homes. The Infrastructure (Financial Assistance) Bill will include guaranteeing the debt of housing associations and private sector developers.
• Build up to 15,000 affordable homes and bring 5,000 empty homes back into use using new capital funding of £300m and the infrastructure guarantees
• An additional 5,000 homes built for rent at market rates in line with proposals outlined in Sir Adrian Montague’s report
• Thousands of big commercial and residential applications to be directed to a major infrastructure fast track. Where council planning departments poorly perform, developers can call on Planning Inspectorate to take the decision
• Calling time on poor performing town hall planning departments, putting the worst into ‘special measures’ if they have failed to improve the speed and quality of their work and allowing developers to bypass councils. More applications also will go into a fast track appeal process.
• 16,500 first-time buyers helped with a £280m extension of the successful ‘FirstBuy’ scheme, which offers aspiring homeowners a much-needed deposit and a crucial first step on the housing ladder.
• For a time limited period, slashing planning red tape, including sweeping away the rules and bureaucracy that prevent families and businesses from making improvements to their properties, helping tens of thousands of home owners and companies.
The deputy prime minister said: “This is a Coalition Government, determined to get on with the job of delivering a healthier economy.
“Today’s major boost to housing and planning will make it easier to build a home, easier to buy a first home and easier to extend a home. A boost that will get Britain building again. Building thousands of affordable homes and generating thousands of new jobs.”