Small and medium-sized construction firms are to receive a boost with the announcement of government plans to directly commission the building of more than 10,000 new homes.

SME builders will be able to bid for housing plots in England that have already had planning permission authorised, as part of the scheme set to be announced by Prime Minister David Cameron.

Mr Cameron said the “radical” scheme, the like of which has not been seen since the 1980s, would help to increase the rate of new homes being built.

Of the 13,000 homes to be built, 40% will be starter homes aimed at helping first-time buyers under the age of 40 on to the property ladder by offering a 20% discount on prices.

An additional £1.2 billion worth of funding will see the fast-track construction of 30,000 new starter homes and up to 30,000 market-rate homes on brownfield sites by the end of the decade.

Direct commissioning, in which the Government takes responsibility for developing land from large building firms, was last used on this scale during the regeneration of London’s Docklands.

The new projects form part of the Government's commitment to building 200,000 starter homes before the end of the Parliament.

Building of the first directly commissioned homes will get under way later this year in Dover, Chichester, Gosport, Northstowe in Cambridgeshire and Old Oak Common in north west London.

Mr Cameron said: “This Government was elected to deliver security and opportunity - whatever stage of life you’re at. Nothing is more important to achieving that than ensuring hard-working people can buy affordable homes.

“Today’s package signals a huge shift in government policy. Nothing like this has been done on this scale in three decades - government rolling its sleeves up and directly getting homes built.

“Backed up with a further £1.2 billion to get homes built on brownfield sites, it shows we will do everything we can to get Britain building and let more people have the security that comes with a home of their own.”

The announcement has also been welcomed by industry leaders such as Brian Berry, chief executive of the Federation of Master Builders.

Mr Berry said: “When it comes to building new homes, the availability of small sites is the single biggest barrier to SME (small and medium-sized) house-builders increasing their output.

“Any measures that the Government can introduce that will increase the number of small sites suitable for SME house-builders will help address the housing shortfall.

“It is also encouraging that the majority of these sites will already have planning permission in place as obtaining permission is all-too-often a lengthy and protracted process - avoiding this time delay should help house-builders increase their supply much more quickly.”