He stated that half these new homes will be sold as starter homes which will be sold at a 20% discount. Osbourne also tried to help the housing crisis in London, stating that the capital's new Help to Buy scheme will give a 40% interest-free loan to buyers with a 5% deposit.
Housing was targeted as Mr Osborne's key area for focus, he said: "In the end Spending Reviews like this come down to choices about what your priorities are.
"And I am clear: in this Spending Review, we choose housing. Above all, we choose homes that people can buy for there is a crisis of home ownership in our country.
"We made a start in the last Parliament, and with schemes like Help to Buy the number of first-time buyers rose by 60 per cent.
"But frankly we need to do much more. Today, we set out our bold plan to back families who aspire to buy their own home."
Ministers are to change planning rules to release land specifically for developing starter homes. And developers are to be offered cash from the Government to construct starter homes and regenerate 'brownfield' land.
The Chancellor also committed to 135,000 new "shared ownership" homes. Buyers will be able to buy an initial stake in a new property and increase their share over time if they are able to.
The Government will provide £4 billion for housing associations, local authorities and private-sector developers to build shared-ownership dwellings. These properties will be available to families with an income of £80,000 outside London or £90,000 in London..
And he promised £400 million for housing associations and private developers to build 8,000 homes specifically designed for older residents or those with disabilities.
Treasury officials said the package will represent "the largest programme of affordable housebuilding by a government since at least 1979, and the biggest ever programme of government building of homes for sale."
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