The Government has announced it is investing £1.4bn in an effort to deliver tens of thousands of affordable new homes.

Chancellor Philip Hammond laid out his plans to help ‘just about managing’ families in today’s Autumn Statement and stressed the importance of tackling the housing crisis.

The extra investment--in addition to the £4.7bn fund already set aside for building affordable homes--will help the delivery of an estimated 40,000 houses.

‘The government will relax restrictions on grant funding to allow providers to deliver a mix of homes for affordable rent and low cost ownership, to meet the housing needs of people in different circumstances and at different stages of their lives,’ he explained.

‘The NPIF [National Productivity Investment Fund] will provide an additional £1.4bn to deliver an additional 40,000 housing starts by 2020-21.’

Mr Hammond MP also said a new Housing Infrastructure Fund of £2.3bn by 2020-21 will be created. It will be funded by the NPIF and allocated to local government on a competitive basis. He estimated it would deliver up to 100,000 new homes.

The Government will also invest £1.7bn by 2020-21 to speed up house building on public sector land in England and it will fund a large-scale regional pilot of the Right to Buy for 3000 housing association tenants.

Delivering his first Autumn Statement as chancellor, Mr Hammond MP also announced he would impose a ban on high letting fees—the administrative costs which renters are required to fork out to letting agencies.

According to the latest English Housing Survey, the average amount renters paid in agency fees was £223. The homelessness charity Shelter also found in 2012 1 in 7 private renters paid over £500.

Responding to the Government’s announcement, John Healey MP, Labour’s shadow secretary of state for housing, described it as ‘too little too late.’

‘Six years of Conservative housing policy have led to the lowest level of new affordable house building in 24 years. Today’s announcement is too little and too late.’

He said it was ‘too little’ to make up for the cuts in housing investment since 2010, and ‘too late’ to rescue what he characterised as ‘failing’ flagship policies, such as Starter Homes.

On the question of letting fees, Mr Healey MP said: ‘Labour has long backed ending sky-high letting fees for renters, while Conservative MPs including the Prime Minister have repeatedly voted against it, so any change of heart is welcome.’

Shelter’s chief executive Campbell Robb welcomed the prospect of more investment into affordable housing, but warned the ‘devil will be in the detail’.

‘This extra investment will be welcome news for many of the “just about managing” families crying out for homes that are genuinely affordable,’ he said.

‘It’s promising to see restrictions on funding relaxed, which should help to build the homes that those struggling actually need - including affordable homes to rent.’

He added: ‘As always the devil will be in the detail, and we looking forward to working with the government to make sure that this funding helps provide homes for those struggling with high housing costs right across the country.’

Mr Robb also said he was ‘delighted’ the Government had decided to crack down on letting agent fees.

‘Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we’re delighted with the government’s decision to ban them.

‘We’ve long been campaigning on this issue and it’s great to see that the government has taken note.’

The chief executive of the think tank Localis Liam Booth-Smith welcomed the fact the new investment comes with ‘fewer strings attached’.

‘The £1.4bn injection into the Affordable Homes Programme is good news. Housing associations, developers and councils will be able to bid for a larger pot of money to fund new affordable housing,’ he said.

‘Whilst the cash figure will get the headline, the bigger change is that the grant funding will come with fewer strings attached than previously.

‘Bidders will be able to use it to build homes for affordable rent, not just shared ownership and Rent to Buy as was the case in the previous prospectus.’

Despite Localis’ enthusiasm for the new investment, they still warned it was ‘a drop in the ocean’.

‘The equivalent affordable homes scheme between 2011 and 2015 was of similar financial size and ambition, and whilst fairly successful in building homes for affordable rent, it did little to stem the affordability crisis.

‘This is a sensible and welcome move by the Chancellor, but without significant change in the upcoming housing white paper it's a sticking plaster.’

Agreeing with Localis, the union GMB also characterised the new investment as ‘a drop in the ocean’.

A spokesman said: ‘The announcement of 40,000 affordable homes is a truly pathetic fig leaf to hide the Government’s naked lack of housing policy – affordable home building dipped to a 24-year low just last week.’

Arcadis, a private consultancy specialising in housing, was less welcoming of the Government’s announcement.

Their head of residential and regeneration Richard Jones said: ‘Government needs to stop paying “lip service” to the housing emergency. What we need is a co-ordinated approach to the problem rather than just rolling out initiative after initiative.

‘We need to look at what building 200,000 homes a year would look like from a need perspective and ensure that any new policy helps deliver this.

‘It will invariably show that a large proportion of new housing will need to be intermediate or private rent, so Government policy should help to support this through the prioritising of public sector land to certain tenure groups, buy-as-you-rent initiatives, planning amendments and a supportive tax regime.’