The government has pledged to spend £150m on infrastructure for new housing developments, as part of its comprehensive spending review.
At the same time Chancellor Gordon Brown announced a 50% increase in the budget for social housing.
More money will also be made available to speed up the planning application process and renovating houses in the north and midlands.
The extra cash will be allocated between now and 2007-08.
At present, fewer homes are being built in Britain than at any time since the 1920s.
Although the UK population is only growing slowly, immigration, divorce and longer life expectancy mean that the number of households in the UK is growing apace.
As a result, housing charities and construction industry groups have concluded the UK is in the grip of an affordable housing crisis.
In March, the Treasury's Barker Review of housing supply said up to 140,000 new homes a year were needed in Britain in order to meet increased demand.
The government is committed to the building of 200,000 new homes in parts of Kent, Essex and Bedfordshire.
Nearly four-fifths of the new homes are to be built on so-called brownfield sites.
Pierre Williams, spokesman for the House Builders Federation, said that the £150m extra to fund infrastructure improvements in new build areas was essential.
Housing and the spending review
50% increase in new social house building to provide 10,000 extra homes a year
£150m to go into the Community Infrastructure Fund to pay for improvements to transport links and services in new-build areas
New investment for renovating homes in parts of the North and Midlands
Extra cash through the Planning Delivery Grant to help local authorities speed up the planning application process
"The problem is that the government wants new developments on brownfield sites which don't have the roads, schools and hospitals to support a community," Pierre Williams, spokesman for House Builders Federation told BBC News Online.
The Office of the Deputy Prime Minister (ODPM) said it would spend the extra cash on transport infrastructure for the growth areas of the South East.
In addition, the amount of money available to spend on renovating abandoned residential properties in the North and Midlands will nearly treble from £160m in 2004-05 to £450m in 2007-08.
The Chancellor announced a 50% rise in spending on social housing and extra cash for regeneration projects in the north of England and Midlands.
In total, the government estimates that 10,000 extra houses a year will be built.
Housing charities welcomed the extra cash but stressed delivery of good quality social housing was a hurdle that as yet had not been jumped.
"The key challenge now will be to ensure that the new social homes, that are so desperately needed, are actually built.
"Only by showing a long term commitment to social housing will the government truly tackle the worst aspects of Britain's housing crisis," Adam Sampson, director of housing charity Shelter said.