The 'Get Britain Building' fund is to be expanded, with banks offering loan guarantees totaling £20 billion, confirmed Chancellor of the Exchequer George Osborne as he unveiled the 2012 budget.
Other measures introduced included a "new, reinvigorated" 'Right to Buy' scheme and a 'New Buy' scheme.
The 'Get Britain Building' fund is expected to jump-start the shovel-ready housing developments that have been put on hold because of lack of funds to get work going.
The original 'Right to Buy' scheme, introduced by Margaret Thatcher in the 1980s, offered generous discounts of up to 60% to encourage some tenants to buy their own council homes. However, the scheme lost interest after successive governments tinkered with it.
Under John Prescott, for example, the discounts were capped at £38,000 and the number of sales steadily fell from falling from an annual peak of 84,000 a decade ago to fewer than 3,700 sales last year. The chancellor is now hoping to get the old scheme going again.
Finally, the 'New Buy' scheme was also welcomed, with analysts stating that it removed the obstacle of a large deposit which had been a key factor holding back the housing market in recent years.
The scheme offers a 95% mortgage product to both first time buyers and those looking to move up the property ladder. Importantly, it has no salary cap and is available to purchasers of new homes up to the value of £500,000.
Mike Farley, chief executive of Persimmon said that this was a positive budget. "We welcome the announcement of additional funding for the Get Britain Building scheme, which will be positive for the housebuilding industry.
"The Chancellor also confirmed that the National Planning Policy Framework will be published next Tuesday, a policy we anticipate will simplify the planning process, kick-start much needed housing developments and create hundreds of jobs."
This feature was written for our sister website Interactive Investor