Bids are being invited from housing associations, house builders and not-for-profit bodies to deliver proposals for a range of housing projects across London.

According to the Mayor, the £100m investment – made through the ‘First Steps’ programme – has the potential to boost the London economy by £2bn, spurred by around £1bn worth of construction.

Johnson said: “So, in the long tradition of the great house building programmes of the past and of London’s great philanthropists such as George Peabody, I want to make a new housing covenant with Londoners, one that recognises that those who contribute to our success should benefit from it too.

“To improve the housing choices of those who work to make this city the fantastic place that it is, I am opening up the market, cutting red-tape and injecting £100m worth of investment to stimulate supply.

“The programme we are announcing will not just unlock the door to home ownership for thousands more Londoners, it will give a welcome shot in the arm for jobs in the capital’s construction industry and spur wider economic growth too.”

The Mayor has vowed that all “reusable investment” from this funding boost will be reinvested for further affordable homes delivery over the next decade.

The homes deal is open to working London households on incomes up to a maximum joint income of £64,300 a year but with flexibility up to £77,200 per annum for families with dependents purchasing properties with three or more bedrooms. The first homes are expected to be available for sale in Spring 2013 with completions ranging up until March 2016.