Philip Hammond has announced a £3.7bn investment in housing supply, to build 140,000 new homes to buy and rent by 2020-21, in a bid to ease the housing crisis.

The new measures will run alongside existing schemes such as the Help to Buy: equity loan scheme and the Help to Buy ISA, but instead of helping aspiring homeowners to afford to get onto the ladder, he plans to tackle the supply side problems.

The Chancellor is focused on boosting supply by helping house builders to secure funding. He will set aside £2.3bn by 2020-21 to deliver up to 100,000 new homes in areas of high demand.

A further £1.4bn has been set aside to deliver 40,000 affordable home starts by 2020-21. It plans to relax restrictions on grant funding to allow providers to deliver a mix of homes for affordable rent and low cost ownership. Hammond said the aim is to meet the housing needs of people in different circumstances and at different stages of their lives.

Jane Forbes, PwC housing partner, said: “Housing supply remains a critical issue for the country. The Lyons Housing Commission only last week indicated that concern from the public over housing, ‘is the highest it has been for 40 years’ and there had been great expectation that today’s Autumn Statement would bring the necessary interventions from government to address the supply shortage.”

Hammond also said the government will publish a Housing White Paper, setting out a comprehensive package of reform to support the strategy, expected shortly.