Local councils must provide more land to build new houses under plans to create 165,000 affordable homes in the next three years, housing minister Kris Hopkins has said.
Housing associations, councils and construction firms can bid for Government funding from today which, combined with private investment, will deliver a £23 billion programme between 2015 and 2018, the Department for Communities and Local Government (DCLG) has said.
Mr Hopkins said it was "vital" local authorities provide more land for new homes under the programme, which is expected to support 165,000 construction jobs.
"Housebuilding is an essential part of this Government's long-term economic plan," he said.
"That's why we have designed an ambitious new scheme to build affordable homes at the fastest rate for 20 years.
"Our programme will support 165,000 jobs in construction, sustain thousands of small businesses and provide homes where future generations can live and raise families of their own."
The DCLG said social landlords who own very valuable homes in the most expensive parts of towns and cities will need to show they are "using their property portfolio in the most effective way possible".
When a home they rent becomes vacant, social landlords will have to consider whether to re-let the property to a new tenant or sell it and use the money to build new homes, the department said.
Housing associations which apply for funding will have to focus on delivering new homes which are in short supply in their local area, the DCLG has said.
This could result in more one and two bedroom homes being built, so that smaller households can move to more "suitably-sized" accommodation, it added.
The new scheme follows the current affordable housing programme which aims to build 170,000 homes by 2015, meaning 335,000 new affordable homes will be delivered between 2011 and 2018, according to the DCLG.