Theresa May’s promise of a council housebuilding “rebirth” was criticised as a damp squib, when it emerged just 5,000 extra homes a year will be delivered.
A £2bn cash injection was announced in the Prime Minister’s ill-fated conference speech, in which she declared it “my mission to solve this problem".
But her aides acknowledged the extra funding was expected to build only a further 25,000 homes, on top of an existing five-year programme between 2016 and 2021.
Contrary to earlier suggestions, councils will not be allowed to borrow more money for housebuilding, with the strongly-resented strict cap remaining in place.
The housing charity Shelter said: “All new money is welcome, but with over 1.2m households on waiting lists this is only a fraction of the long-term investment required.”
Lord Porter, the Conservative chairman of the Local Government Association, welcomed the announcement, but suggested it fell well short.
“The only way councils will be able to significantly deliver the new homes we need is if they are given genuine powers to invest in housing,” he said.
“This means the ability to borrow to invest in new council housing, to keep 100 per cent of right to buy receipts to replace sold homes, certainty over future rents, powers to make sure developers build approved homes in a timely fashion, and adequately funded planning departments so that they can cover the cost of processing applications.”
And Labour said: “The Tories announced an additional £2bn for house building, but this will only build paltry extra 5,000 homes a year.
“The Tories new proposal also means they will be investing less than half than Labour did in their last year in government in affordable housing.”
The Conservatives, however, said the announcement amounted to an extra 12,500 homes a year – because all would be built in 2019-20 and 2020-21.
Defending their record, the party also pointed to the number of housing starts in England now standing at the highest figure for nine years.
In her speech, Ms May said the extra £2bn would take the total investment in the Government’s affordable housing programme to almost £9bn.
“We will encourage councils as well as housing associations to bid for this money and provide certainty over future rent levels,” she said.
“And, in those parts of the country where the need is greatest, allow homes to be built for social rent, well below market level.
“Getting government back into the business of building houses. A new generation of council houses to help fix our broken housing market.
“So whether you’re trying to buy your own home, renting privately and looking for more security, or have been waiting for years on a council list, help is on the way.”
Where social rents are allowed, tenants will pay 30-40 per cent of market rents – rather than the much higher 80 per cent figure in so-called “affordable rent” homes.
