During her speech to the Conservative Party Conference, blighted by a coughing fit and a stage invasion from a prankster waving a dummy P45, May said it was time the government got back into the business of building houses.

She said the additional £2bn would bring the government’s total affordable housing fund to around £9bn, with councils and housing associations invited to bid for the money. However, the government’s announcement of a £2bn fund that would deliver 25,000 homes for social rent over the next five years was described as falling well short of what is required.

Moda Living’s managing director Johnny Caddick said the “modest sums promised” would “not move the dial” in terms of housebuilding volumes. He added that there was a critical need for the government to continue attracting private investment, without which very little housing would be delivered.

“It’s crucial that councils are encouraged to embrace build-to-rent and realise the wider benefits of making cities attractive places to work and study,” he said.

May’s commitment to building “a new generation of council houses to fix the broken housing market” was welcomed by L&Q chief executive David Montague.

However, he added, while councils would “rise to the challenge”, they would need time to scale up and the nation needed more housing now.

“Housing associations stand ready to work alongside them, building on our strong existing partnerships to ensure that spades are put in the ground as quickly as possible,” he said.

Montague also welcomed May’s commitment to allowing EU nationals to remain in the UK in light of the looming construction skills crisis.

“The PM offered a deal - she said the government will provide the land and the skills young people needed, but in return builders must provide the homes,” he said. “That’s a deal this country needs and one that we will be delighted to sign.”