Yvette Cooper announced a huge £8 billion building programme yesterday to help first-time buyers and families on low incomes. An extra 210,000 affordable homes will be built over the next three years.

Council building will get a big boost and the Housing Minister unveiled a range of reforms to help young families get on the property ladder, including an equity scheme for those earning less than £60,000 a year.

Under the scheme the Government will give first-time buyers and key workers 17.5 per cent of the cost of a new home in return for a share in the profits when they sell.

The proposals in the Green Paper include grants for local authorities that provide detailed five-year building plans. They will also be allowed to borrow money from the private sector and keep rental income. Town halls will be encouraged to build council homes for the first time in nearly 30 years, and social rented housing is expected to increase by 50 per cent from 30,000 to 45,000 a year.

Good houses don’t just happen at the click of a Prime Minister’s fingers - they will take time

BACKGROUND

• Comment: The housing shortage

• A new property map of England

• What a decade brought

• Red tape to be cut for home extensions

• Brown to build five eco towns

Comment: The housing shortage

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But housing bodies and council chiefs complained that the Government had not provided enough money and that they would need at least £11 billion to fund the programme. There were also concerns that the extra £300 million announced by Ms Cooper to kickstart infrastructure was not enough.

Sir Simon Milton, chairman of the Local Government Association, welcomed the new council powers that would help to cut waiting lists. But he added: “To turn rhetoric into reality, the LGA estimates that the Government needs to invest around £11.6 billion in new, affordable housing over the next three years, rather than the £8 billion announced.

“Councils will be far from convinced that enough money is being made available for infrastructure. Sufficient funding for the roads, schools and hospitals needed to turn desolate dormitories into places where people can live and work is vital.”

In a Commons statement Ms Cooper made clear that the proposals would include a mix of social, private and council housing and that there would be no return to 1950s-style high-rise blocks.

Although a few of the growth areas are expected to be in the North, there were fears that many of the extra homes would be built in parts of the country that are already crowded.

Altogether three million homes should be built by 2020, 60 per cent of them on brownfield land. Restrictions on greenbelt land will not be relaxed, although there could be more building on greenfield sites. About 200,000 homes will be built on surplus land owned by the MoD, NHS, councils and other agencies by 2016. But there were no signs that the Government was prepared to subsidise public sector land for housing associations or private developers, as many experts had demanded.

Housing associations argued that as they are expected to match any funding allocated by the Government they would not be able to raise £8 billion in the three years to 2010.

The National Housing Federation said: “Attempting to meet the Government’s house-building targets with this flawed financial modelling could bankrupt the housing association sector within five years, and could easily lead to us making the same mistakes of the 60s and 70s all over again.”

Private builders will be discouraged from building up land banks and will be required to put up most of the infrastructure for a site within three years of gaining planning permission. Their accounts will also be open to scrutiny to uncover any hidden banks of land.

Roger Humber, housing spokesman for the National Federation of Builders, said: “The gap between the Government’s aspiration for more homes and the actual delivery seems as wide as ever. Little new money and nothing to improve the delivery of land through the planning system has been provided – and without more land, output simply can’t increase.”

Ms Cooper said: “Taken together, these proposals represent not just the most significant programme of house-building for decades, but an ambitious, positive response to the growing challenges that many people face in their day-to-day lives.”

Alan Ritchie, general secretary of Ucatt, the building workers’ union, said: “The Government’s commitment to build a far higher number of affordable homes is warmly welcomed and is long overdue. Hundreds of thousands of families in dire housing need will be relieved.”