NORTH-EAST construction companies welcomed the Prime Ministers drive to get "Britain building again" amid calls for a more radical revamp of the housing sector.

Buyers of new homes will be able to borrow up to 95 per cent of their value as part of plans unveiled yesterday in the Governments long-awaited housing strategy.

The mortgage indemnity scheme, in which the taxpayer will underwrite part of the risk to lenders, could help up to 100,000 people in England when it is launched in the new year. The plans also include a £400m Get Britain Building fund to help projects, which have been put on hold due to a lack of funding. The Coalition claimed the cash would unlock the construction of up to 16,000 new homes, supporting 32,000 jobs in the process.

Mr Cameron also backed plans for up to 60 per cent discounts on council homes in a revamp of right-to-buy.

Housebuilder Dunelm Homes, part of County-Durham-based ESH Group, welcomed the move as "as a positive step forward" for the industry which has suffered from stagnant property sales and cuts to public building projects.

A spokesman added: "With more houses being built in the future, a boost for local employment will be particularly encouraging in the current climate. The North-East has a strong construction heritage and any plans by the government to persuade local authorities to release land and make ownership more accessible for buyers is an encouraging step forward in improving regional construction levels. "Dunelm Homes, like many homebuilders, has a stock of land across the region awaiting development and with the new funding measures announced today the company will be in a better position to develop its land bank and create new schemes for first time buyers and families in the region.

"Through the proposals laid out in the Housing Strategy document, the Government has recognised housing and the construction sector as an important part of the economy and we wholeheartedly support their efforts in making all parts of the industry work together to build our way into economic recovery."

However, the Federation of Master Builders (FMB) said the reforms did not go far enough and called for more radical action to revive the industry.

"It does little to help small and medium sized (SME) house builders who have the potential to deliver the homes that are required if the right policies and incentives were put in place," said Brian Berry, FMB director.

"The scale of the housing problem is now so enormous that we need to increase the supply of new homes by at least 500,000, the equivalent size of Birmingham, by 2015, if we are to meet rising demand. If the Government was seriously committed to increasing the supply it would reintroduce housing targets for communities that failed in their obligation to meet local demand."