London will receive more than £2million to help first-time buyers, many of whom are struggling to get on the property ladder.
The region has received the sum from a new fund, which has been filled with additional money raised from the Stamp Duty on second homes.
The Government is reallocating the revenue – totalling £60million – across nine different areas of England.
It will be distributed to “community-led” groups to support initiatives for the development of new affordable housing.
Housing Minister Gavin Barwell said: “The high number of second homes can be a frustration for many who struggle to find an affordable home in their community.
“This new fund will help tackle that by boosting supply and making sure community groups are at the heart of delivering new homes, so that this is a country that works for everyone.”
Labour has suggested that the Government still isn’t doing enough to tackling the nation’s “housing crisis” and called for more radical action to address the shortage of homes.