Housing minister Yvette Cooper stated that the Government will be spending £10.2 billion on affordable housing for all.
This equates to 45,000 new homes annually by 2010-11; which is 50% more than the current level.
"Every region needs more affordable, decent homes - not just to own, but also to rent. Unless more homes are built, first-time buyers and young families will find it more and more difficult to get a foot on the housing ladder," said Ms Cooper.
In total some 110,000 social homes will be built over the next three years.
The money has been allocated in the wake of chancellor Alistair Darling's pre-Budget report which was published last week.
Ms Cooper announced the funding would be employed to improve existing social housing and for regeneration projects across the UK. Allocation is based on a number of factors, including the number of households in temporary accommodation in a region, the number of overcrowded houses and the condition of local authority and private housing stock.
"We all need to work in partnership to deliver these houses. This increased investment means that housing associations and councils can start planning now for more affordable homes in their area," continued Ms Cooper.
London will receive the most money from the total announced with £3,970 million being spent in the area to 2010/11, a rise of 27% on current funding levels.
The south-east will receive an increase of 30% in its spending with £1,372 million being allocated to the region.
But the south-west and east of England will benefit most with increases of 50% and 45% respectively for social housing by 2010/11.