Shadow Chancellor Ed Balls will today also reveal plans for a two-year stamp duty holiday for first time buyers to get the housing market moving again.
The proposed stimulus package shows there is now consensus among all political parties that an 100,000 new homes are needed to tackle the deepening housing crisis.
While the Coalition hopes to deliver the homes with £10bn of loan guarantees, Labour is banking on winning votes with a directly funded house building programme.
Balls will unveil his plans at Labour’s party conference in Manchester under the slogan Rebuilding Britain.
He will say the plan is the “bold and urgent action needed now” to boost employment and affordable housing after 119,000 construction jobs have been lost in two years and a 68% fall in the number of social homes being built.
“So with this one-off windfall from the sale of the 4G spectrum, let’s cut through the dither and rhetoric and actually do something. Not more talk, but action right now,” he will say.