This subsidiary of Homes England will be publicly owned and backed with £16bn of funding in addition to £6bn of existing finance to be allocated within this parliament.

The aim is for the National Housing Bank to leverage up to £53bn in additional private investment to deliver these new homes.

Operating as a Public Financial Institution, or PuFin, this will provide debt, equity and guarantee products for developers with specialised products for SMEs.

This will also see it expand alliances with the private sector and enter into partnerships with institutional investors.

The government will also work with the Mayor of London to establish a City Hall Developer Investment Fund, supporting housing generation around London Euston to build around 80,000 homes a year.

In Greater Manchester, the Housing Investment Loan Fund will be extended to deliver thousands of new homes over the next ten years.

A programme of investment including £5bn grant funding for infrastructure and land from the new National Housing Delivery Fund will complement capital investment from the National Housing Bank.

As part of this, the Ministry for Housing, Communities and Local Government and Homes England may agree that some of this £16bn allocation for the National Housing Bank will be devolved to the GLA or Mayoral Strategic Authorities.

This money would therefore be delivered outside the remit of the Bank, but with the same targets and objectives.

•   The Finance Professional Show 2024: The Video
•   Govt unveils £39bn in housing grants
•   'Disastrous' planning approvals figures at their lowest since 2012

“This government is delivering reform and investing in Britain’s renewal through our Plan for Change,” said Angela Rayner, deputy prime minister and housing secretary.

“Our foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership — or ensuring children don’t have to grow up in unsuitable temporary accommodation, and instead have the safe and secure home they deserve.”

The announcement of this new bank has been welcomed by the housing industry.

“The National Housing Bank is another welcome, innovative initiative from the government and a clear statement of intent on fixing the housing crisis,” said Kate Henderson, CEO at the National Housing Federation.

“Alongside the ambitious new Affordable Homes Programme and the long-term certainty provided by the new rent settlement announced at the Spending Review, the £2.5bn low-cost loans for social housing providers will bolster our sector’s capacity to get building.”

Brian Berry, CEO at the Federation of Master Builders, added: “A new clear pathway like the National Housing Bank will give developers confidence to borrow.

“This is a bold change and sorely needed if the government is to deliver its 1.5 million housing target.

“While details are still to be tied down it will be important that the new bank is able to provide suitable finance options for smaller and micro house builders to help local economies thrive."