The FT has reported that the plan will be announced today as part of the Lyons review commissioned by Labour leader Ed Miliband to look at ways to improve the housing market.
Labour also plans to introduce rent caps if it comes to power.
Miliband will say in a speech today that councils would be allowed to designate new “housing growth areas” with powers to assemble land and ensure that building takes place.
In these zones, authorities would be able to give priority access for more than 50% of the homes to first-time buyers for the first two months after the homes are completed.
They would also be able to restrict the sale of homes in those areas to stop buy-to-let investors from purchasing them.
Housing campaigners claim that new build properties are often snapped up by foreign investors, often before they’re built.
