02/10/2011 06:14 BST | Updated 02/12/2011 05:12 GMT

David Cameron: Housing Reforms Would 'Fire Up' The British Economy

Extensions to the right to buy council homes and the release of thousands of acres of brownfield to developers are designed to to "fire up the engine of the British economy" Prime Minister David Cameron said.

Cash-strapped developers will be given the chance to build homes first and pay for the land later, removing the need for costly or unavailable loans under the new policy.

The "housing market isn't working" Cameron told Andrew Marr in an interview with the BBC. "Why isn't working? Because of the debt crisis, the banks are bunged up with debt, so the banks aren't lending, the builders aren't building and the buyers can't buy because they can't get the mortgages that they need.

"So this Government isn't just sitting back, we are rolling up our sleeves and saying right, we're going to make over Government land to housebuilders on the basis that they can build now and pay for the land when they sell the homes.

"That could build 100,000 homes, 200,000 jobs in our economy."

Cameron also said that the 'right to buy' would be extended and that any profit made through the scheme would be used to build new, lower-rent homes.

"We're saying let's bring back the right to buy your council house, with proper discounts that Labour got rid of, and let's use that money, when people choose to buy their council home, let's use that money to build homes for rent, for low rent for families."

The PM defended his strategy after it came under fire from MP Andrew Tyrie, who chairs the influential Commons Treasury select committee, who said the Government's economic response lacks a "coherent and credible" plan for growth.

Communities secretary Eric Pickles added that the new homes would be built only on brownfield land.

"I want to be absolutely clear, there is no question whatsoever of building on green belt land," Pickles said in an interview on Sky News.