Government plans to invest £170 million in social housing, by funding the construction of 4,000 rented homes have been welcomed by housing representatives.

However, the coalition government also announced that the Communities and Local Government department will face a budget cut of £780 million during the 2010/11 financial year, whilst the £1.5 billion pledge to housing made by Labour is to be reduced by £180 million.

David Orr, Chief Executive of the National Housing Federation said in a statement: "I am delighted the coalition government has recognised that social housing represents a key front line service that is in need of extra funding.

"With record housing waiting lists and overcrowding reaching epidemic proportions in many places across the country, the need for more social housing has never been greater."

Rising unemployment and repossessions as a result of the economic downturn, have prompted a demand for affordable housing, but there are a record 4.5 million people in England currently on housing waiting lists.

The construction of more affordable homes will not only help reduce housing waiting lists, but will mean hundreds of openings for construction and social housing jobs across the country.

Another major issue of social housing is overcrowding, as families get bigger across the UK. Approximately 2.5 million people are living in either cramped or unsuitable conditions, which in time will be another problem the government and social landlords will have to face. But, for now housing bosses are glad of the coalition's commitment to the housing industry. 

"This hopefully signals the Government's long term commitment to protecting public spending on social housing and to tacking the country's chronic housing crisis," Mr Orr maintained.