In a speech at the Labour annual conference in Manchester, Balls will reveal his plans to use the profits raised by the sale of 4G mobile phone licences to fund a two-year Stamp Duty holiday on all properties worth under £250,000.

Balls will also tell the conference he would build 100,000 affordable homes with the proceeds.

The government is yet to disclose how it will handle the sale of the licences, but Labour expects the sale will raise around £4bn.

Balls will tell delegates: “With 119,000 construction jobs lost in two years and a 68% fall in the number of affordable homes being built, we need bold and urgent action now.

“The government is anticipating a windfall of up to £4bn from the sale of the 4G mobile phone spectrum. In the good times, Labour used every penny of the £22bn from the sale of the 3G licences to pay off national debt. But in difficult times, we urgently need to put something back into the economy.

“Let’s commit that money from the 4G sale and build, over the next two years, 100,000 new homes – affordable homes to rent and to buy – creating hundreds of thousands of jobs and getting the construction industry moving again.”

Ben Thompson, MD of Legal & General Mortgage Club, commented: “The introduction of a two-year Stamp Duty break for first-time buyers, combined with the construction of 100,000 new affordable homes is exactly the kind of measures housing market needs to boost growth.

“The average age of first-time buyers has been increasing steadily over the last five years due to a combination stringent lending criteria, high deposit requirements and a lack of affordable housing. A Stamp Duty holiday on properties up to £250,000 will certainly help to rectify this issue.”

Matthew Turner, director of buying agents, Astute Property Search, added: “Balls is no mug. He knows that the recent Stamp Duty holiday lifted transaction levels and created a feel-good factor in the property market.

“There’s no doubt that a two-year Stamp Duty holiday for first-time buyers would boost the property and broader construction markets. At the moment, there is little activity in the market other than at the higher end where people have equity and sufficient deposits.

“The problem is that this is a promise based on a premise – that Balls ever gets back into power.”