THE Prime Minister has vowed to bring the "dream of home ownership" back within reach.

Theresa May told the Conservative Party conference that measures to "build the homes this country needs" would see councils given greater freedom to borrow to fund the construction of new houses.

She said the "broken market" needed fixing to put the "dream of home ownership" back within people's reach.

"Solving the housing crisis is the biggest domestic policy challenge of our generation," she said in her keynote speech, which began with her dancing onto the stage to Abba's Dancing Queen.

She announced the Government will scrap the cap on the amount councils can borrow against their housing revenue account assets.

Before the introduction of the cap under Margaret Thatcher, councils built around 10,000 homes a year - but that figure has dipped as low as 100.

"The last time Britain was building enough homes - half a century ago - local councils made a big contribution," the Prime Minister said.

She pledged: "We will help you get on the housing ladder. And we will build the homes this country needs."

Council chiefs had been calling for the cap to be scrapped and welcomed the announcement.

Lord Porter, chairman of the Local Government Association, said: "The last time this country built homes at the scale we need now was in the 1970s when councils built more than 40 per cent of them.

"Councils were trusted to get on and build homes their communities needed, and they delivered, and it is great they are being given the chance to do so again."