Big developers are to be given more cash in advance to help them carry on building affordable homes through the credit crunch.

Today housing minister Caroline Flint will announce that builders and housing associations will be eligible for front-loaded grants from the Government's £8.4 billion affordable homes pot.

The move is among a package of measures being announced by the Government this month to increase confidence in the market, as first-time buyers and key workers continue to be priced out despite recent falls in property values.

Ms Flint told the Evening Standard: "There is an overwhelming case for building more housing and we must remain as ambitious as possible.

"But we also have to be flexible and responsive enough to adapt to the current economic climate.

"We have to acknowledge not only the difficulties faced by individuals and families, but by housebuilders too."

She warned that unless housebuilding was able to increase as fast as possible when the downturn ends, house prices could soar higher than ever.

"There is a real risk that when the market picks up again, which it will do in time, we'll see another unsustainable property boom, making homes even more unaffordable for first-time buyers and growing families."

The regulations currently allow developers to receive only 50 per cent of their grants at the start of building work, and they get the rest at the end. Other measures to be set out today include:

• Allowing housebuilders to sell their unsold stock to affordable housing providers, who will receive £200 million from the Government.

• Allocating a further £270 million through the Housing Corporation for an extra 3,800 social homes and 1,500 shared-ownership properties over three years.

• Helping councils bid for a share of up to £1.87 billion for new homes and the refurbishment of existing houses and estates.

• Lifting restrictions on when developers and housing associations can bid for funding from the £8.4 billion pot.

A spokesman for the Department of Communities and Local Government said: "We are continuing to look at further options to help first-time buyers and families who aspire to home ownership, and to support the minority of borrowers who may be facing difficulties at the moment."

The Government is already providing an extra £9 million for debt advice, and is expanding free legal representation and advice at county courts for households at risk of repossession.

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