It hopes this will stimulate wider market activity. The Government says the total now allocated over the next three years is £3.6bn out of the £8.4bn total budget.
These new measures are the first part of a wider package of action the Government will be announcing this month to increase confidence in the housing market.
It has also announced plans for a new national clearing house where housebuilders can approach the Housing Corporation with robust proposals to sell their unsold stock for affordable housing.
The Government has committed £200m so far for affordable housing providers to purchase unsold stock from house builders which can then be used for social or affordable housing.
It has also increased the flexibility around when providers can bid for funding from the Government’s £8.4bn affordable housing programme. Rather than waiting for the previous quarterly bidding round, providers can approach the Housing Corporation at any time.
Housing minister Caroline Flint says: “I am determined that we do everything possible to continue to promote stability and fairness in the housing market, and maintain our long term focus on increasing housing supply.
“There is an overwhelming case for building more housing and we must remain as ambitious as possible. But we also have to be flexible and responsive enough to adapt to the current economic climate. We have to acknowledge not only the difficulties faced by individuals and families, but by house builders too.
Flint adds: “My objective is to put together a package of the best possible proposals, working with industry and others to minimise the problems we currently face and create the conditions for a rapid recovery.