Gordon Brown has pledged £1.5bn to the housing sector.
The Prime Minister said the funding would help thousands of new homes as well as create jobs.
The plans will involve both local councils and housing associations and will come into effect in just a few months.
It is estimated that a total of 20,000 new energy efficient houses will be constructed over the next two years as a result of the funding.
An additional 10,000 new properties will also be delivered through the private sector, while up to 45,000 jobs will be created in construction and related industries.
The funding will also support the Government's Kickstart programme, a scheme designed to bring stalled housing projects back on track. Around 13,000 new homes will be built, under this initiative.
Housing Minister John Healey said: "The Prime Minister's housing pledge today is a huge boost to efforts to build more homes the country needs now and in the future. This investment will help fast track construction and I want to see work starting on site within the next few months."
The Construction Products Association said this week that the PM’s announcement confirmed that the government will miss its own target from the 2007 Housing Green Paper.
In 2007 the government announced that it would provide at least 70,000 affordable homes a year by 2010/11 of which 45,000 would be social rentable, but this latest announcement states that only 56,450 affordable homes will be delivered, missing the target by more than 13,500.
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