A £7 billion programme to deliver more than 200,000 new affordable homes in England has been unlocked by communities secretary Sajid Javid in a dramatic expansion of the UK government’s affordable housing programme.

Housing providers can now apply for a share of the fund, which was allocated an additional £1.4bn at the Autumn Statement to deliver 40,000 new affordable housing starts across the country.

Alongside this extra funding, the government is expanding the existing affordable homes programme to offer a wider range of ways of helping people into home ownership and to provide support for those that need affordable housing.

By expanding the variety of tenures available, which now includes Affordable Rent, Shared Ownership and Rent to Buy, the programme will help meet the housing needs of a wider range of people in different circumstances and at different stages of their lives.

This includes homes for Rent to Buy which will be let with rents set at or below 80 per cent of the local market rent for a set time period, giving tenants the opportunity to save for a deposit and then the option to buy their current home.

Mr Javid said the investment aims to meet the diverse housing needs of the country.

He added: “This government is committed to increasing housing supply and halting the decline in affordability.

“Our newly expanded affordable housing programme, turbo-charged by a multi-billion pound investment, will allow housing associations to build more homes in places where they are most needed, particularly for families who are just about managing.

“By encouraging the delivery of more homes under a variety of tenures, we can create a housing market which truly works for everyone, meeting the diverse housing needs of this country.”

Sir Ed Lister, chairman of the Homes and Communities Agency (HCA), said: “The HCA is leading the government’s drive to increase the scale and pace of delivery of housebuilding. The expanded affordable housing programme will help us continue to work with both housing associations and developers new to this area of the housing market to increase the availability of affordable homes.

“The expanded programme will also allow providers the flexibility and agility to respond to local needs and markets. This will boost housebuilding by encouraging providers to deliver a mix of homes for both affordable rent and low-cost ownership that is most suited to each place.”

More will also be announced in the housing white paper out later this month.

Responding to the announcement, David Orr, chief executive at the National Housing Federation, said: “We are delighted to start the new year on such a strong footing with such a clear show of faith from the Government in our sector.

“This funding and the relaxed restrictions for building affordable homes will enable housing associations to provide the right mix of houses.

“We are proud of the strong relationship that housing associations have with the new government and will be working closely to ensure that we can deliver the homes people in this country need.”