THERESA May today opened the door to a council housing revolution as she announced local authorities can now borrow unlimited cash to build new homes.

More than 200,000 new council houses are now set to be built over the next decade thanks to the move.

The announcement is an effort to bring down the sky-high cost of housing to help Brits squeezed by a rise in the expenses of everyday life.

Previously councils faced a legal limit on the amount they can borrow to fund the construction of social housing.

But speaking at the Tory conference in Birmingham today, the PM said: “The last time Britain was building enough homes – half a century ago – local councils made a big contribution.

“But something is holding many of them back. There is a government cap on how much they can borrow against their Housing Revenue Account assets to fund new developments.

“Solving the housing crisis is the biggest domestic policy challenge of our generation. It doesn’t make sense to stop councils from playing their part in solving it.

“So today I can announce that we are scrapping that cap.

“We will help you get on the housing ladder - and we will build the homes this country needs.”

Housing experts welcomed the announcement and predicted it would lead to the construction of more than 20,000 extra homes every year.

Charity Shelter said: “If these reforms announced today liberate local authorities from the restrictions they have faced then we think they could build up to 27,500 new social homes each year.

“For comparison, only just over 5,000 social homes were built last year in total.

“Scrapping the borrowing cap lays down the gauntlet to local authorities to bring forward home-building plans – no more excuses.”

And Lord Porter, head of the Local Government Association, added: “It is fantastic that the Government has accepted our long-standing call to scrap the housing borrowing cap.

“We look forward to working with councils and the Government to build those good quality affordable new homes and infrastructure that everyone in our communities need.”

But critics suggested the move still wouldn’t solve the housing crisis because councils would end up building in the wrong areas.