The new model for funding a three-fold rise in house building was set out today by the Future Homes Commission, set up by the Royal Institute of British Architects.

The body argues leading council pension fund assets should be pooled into a £10bn fund to finance up to 6m homes over 20 years, equivalent to 600 estates a year.

A similar approach to that proposed is already being pioneered by Manchester City Council, which is working with the Greater Manchester Pension Fund to build 244 homes.

The city council will release land into the joint venture at fair market valuation and GMPF will inject £25m to pay for building work.

Both partners will then receive a capital payment on the sale of houses and an annual revenue return.

Commission chairman Sir John Banham said local councils should lead new development, building quality homes with generous space standards that could be sold in future to replenish the pot.

“There is no better time to tackle the UK housing crisis,” he said.

“After a year-long national inquiry, the Future Homes Commission has concluded a housing revolution is entirely possible and will lead economic growth.

He added: “We need to increase massively the number of quality homes being built for many years to come, but also to develop communities which enhance the quality of life for both new residents and those living in existing communities nearby. All this has to, and can, happen without any additional government funding.

“We strongly believe that local government can become the leader of new development once again, by using their assets and powers to create the type of mature, sustainable, mixed tenure communities that Britain needs and that institutional and international investors want to invest in.”