Theresa May has vowed to “get Government back in the business of building houses” after making an additional £2bn available to build affordable housing.

Speaking at the Conservative Party Conference, the Prime Minister said councils and housing associations will be able to bid for the funds and some will be built for social rent below market level.

May said the budget for affordable housing was now almost £9bn and would help build a new generation of council houses.

She vowed to take “personal charge” of the issue and called for house builders to do their bit by building on land made available, adding: “It won’t be quick or easy but I will make it my mission to solve this problem and will take personal charge of the response by reigniting home ownership in Britain once again.”

Commenting on the announcement, Lewis Johnston, parliamentary affairs manager for RICS, said: “It is over 65 years since a Conservative conference committed the party to delivering 300,000 homes a year. With today’s housing challenge no less urgent, the Prime Minister’s plan to unleash the first major government house building programme in decades indicates the kind of ambition we need to tackle the housing crisis.

“In 1968, councils accounted for 40% of all house building and today’s plan is an acknowledgement that councils are an important part of the solution to the supply crisis, although it will be interesting to see how this announcement works with the recent expansion of Right to Buy.

“The success of the plan depends on the Government’s willingness to tackle the other obstacles to building. Alongside the already announced measures we need bold reforms of the planning system and a deep-seated resolve to unlock the potential of modern methods of construction.”

Andy Sommerville, director of Search Acumen, said it was the “first building block” to make up for years of undersupply.

He said: “Now that our leaders share the industry’s sense of urgency, we must act to build more homes and we must act quickly. The gulf between supply and demand is widening each day. For the property and construction industry, this is the cue for Britain to start building.”

Landlords were equally enthusiastic. Richard Lambert, chief executive at the National Landlords Association, said: “The majority of landlords would agree that more social housing should be built, and it’s about time that the Prime Minister set aside a significant pot of money to do so.

“Government, society and indeed taxpayers will get better long-term value from investing in building than in subsidising rents.

“This announcement should not only provide more available housing for those most in need at rents they can afford, it should also relieve the pressure on the private sector, and choke off the breeding-ground for the minority of rogues and criminals who get away with providing sub-standard housing and neglecting their tenants.”