Chancellor Philip Hammond has launched a £2.3bn Housing Infrastructure fund to build 100,000 new homes in high demand and a further £1.4bn for 40,000 additional homes.

Delivering his first, and it turns out last Autumn Statement before it is replaced by an annual Budget from next year, Hammond launched a £2.3bn Housing Infrastructure fund to build 100,000 new homes in high demand areas and a further £1.4bn for 40,000 additional homes by 2020-21.

The Government will relax restrictions on grant funding and allow providers to deliver a mix of homes for affordable rent and low cost ownership, the Autumn Statement says.

The document also outlines £3.15bn for the Greater London Authority to deliver over 90,000 homes in the capital.

Hammond told MPs: “The challenge of delivering the housing we so desperately need in the places where it is currently least affordable is not a new one.

“But the effect of unaffordable housing on our nation’s productivity makes it an urgent one.

“One of the biggest objections to housing development is often the impact on local infrastructure.

“So we will focus government infrastructure investment to unlock land for housing.”

He also announced that the Communities Secretary would release the long awaited housing White Paper “in due course”.

There will also be a regional pilot of Right to Buy for housing association tenants.

Responding to the announcements, Andrew McPhillips, chief economist at Yorkshire Building Society, said: “The measures to address the housing crisis announced by the Chancellor today are welcome but we hope the Government is keeping its powder dry for the eagerly anticipated Housing White Paper and next year’s Budget because more is needed.

“The Government is right to set up the housing infrastructure fund, the additional investment in affordable housing and devolution of funds to London which will start to address the source of the housing crisis – the lack of supply – in order to make homes more affordable in the long-term. The UK has missed house-building targets by a huge 1.2m since 2004, which is likely to take a significant amount of time to compensate for.

“In order to speed up the delivery of new homes, the Housing Minister in the upcoming White Paper should consider devolving more powers to city regions outside London and also give councils the ability to borrow against their assets so that they can better fund house-building in their area.

“Reviewing Stamp Duty and considering making it a seller’s tax should be a top priority in 2017.”

Mark Hayward, managing director of the NAEA, said: “The measures announced during the Autumn Statement to boost house-building go some way to making the housing market work for everyone, but quite frankly do not go far enough.

“The Housing Infrastructure Fund, as well as the fund to build 90,000 affordable homes in London, will act as catalysts to start closing the gap between supply and growing demand, but what we really need to see now is properties being built quickly.

“The Government has a long-standing history of announcing numerous house-building pledges, but in the last few years we’ve not seen a sufficient impact on supply to make a dent in providing the affordable homes we really need.

“The detail in the Housing White Paper will be crucial – let’s hope there are far more detailed plans in there when it is released.”