Housing minister Yvette Cooper said the new phase would challenge developers to deliver either low-carbon or carbon neutral affordable homes. More details will be released in the summer.

“The next phase of the competition provides a fresh opportunity to meet the challenge of building new developments in a more environmentally sustainable way,” said Ms Cooper.

Her announcement comes as several winning consortiums in the competition, which challenges developers to build high standard homes for a £60,000 build cost, begin construction work on four sites.

The SIXTYK Consortium, comprising housebuilder Crest Nicholson plc and structural insulated panel producer Kingspan TEK, is starting work on 68 homes in Newport Pagnell, with 21 being £60k homes.

George Wimpey is beginning construction of 145 homes at Oxley Park, Milton Keynes, using a variety of build methods, including open panel timber frame. The site will include 56 £60k homes.

Other Design for Manufacture developments in the pipeline, but not yet started, include Persimmon’s 137-home project at a former mental hospital in Basingstoke, using the Space4 modular timber frame system. Some 42 £60k units are being provided.

William Verry Ltd will use the German-made WeberHaus closed panel timber frame system for 12 homes in Hastings, with five being £60k homes, as well as 102 units at Aylesbury.

A second project for the SIXTYK Consortium will involve around 150 homes in Coxheath, including 45 £60k units.

Preferred bidders are currently waiting to hear who will be chosen for the 10th and final Design for Manufacture site in Merton, London.