Councils will be allowed to spend more money building houses after Theresa May announced a cap limiting their borrowing is to be scrapped.

The announcement came in the Conservative leader's conference speech in which she said more action was needed to ensure enough affordable homes were built.

She described the issue as "the biggest domestic policy challenge of our generation."

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The cap has long been a source of contention for councils and the news of its abolition has been generally welcomed.

Medway council leader Alan Jarrett said: “Anything that takes the hands of the government away from councils is a good thing so it will make a difference.

"But people should not run away with the idea that this will solve the housing crisis.

"It is not a silver bullet and one important issue is that the money we get from developers through Section 106 agreements [where developers pay to meet costs of schools and other infrastructure] does not come to us immediately but some way down the line.”

The Kent Council for the Protection of England (CPRE) said the move was “desperately needed” to help people get on the housing ladder.