A new government programme aimed at easing housing shortages means Councils in England will be offered extra money for every newly-built home.
Under the New Homes Bonus scheme the government will match the council tax raised on each new house for six years.
Housing Minister, Mr Shapps said: "We will not tell communities how or where to build. But the New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs. With house building falling to its lowest level since 1924 under the previous government, action is needed now to build the homes the country needs."
There were 120,000 homes built last year and there are 4.5million people in England who are on council waiting lists.
For every new home built the government will match the council tax raised on each new house for a period of six years - for a band D home that would be around £1400.
David Orr from the National Housing Federation said, "There are places all over the country where there is a crying need for new homes, but there are still many, many communities where the default position is 'we don't want to see any new homes built here. This incentive might help to persuade some local authorities, whether it will be enough to persuade the local communities - I think that's a much broader question. And I think that there is a different strategy that's needed here, about persuading the nation that we have to be able to house our children, and if we do not build more homes we will not be able to do that."
Greengates Builders Merchants thinks this is a positive move to kick start house building.