An expansion programme on the Docklands Light Railway is expected to bring 18,000 homes to east London.

In his Autumn Budget, chancellor Philip Hammond pledged £291 million to improve the DLR, which will in turn “unlock” 18,000 new homes.

The money will come from the Housing Infrastructure Fund (HIF), a £5bn government grant programme announced in 2016’s budget. Through the HIF, local authorities can bid for funding to build homes, with funding focused on areas of greatest housing demand.

The Greater London Authority (GLA) put in two bids for £550m of funding in September – one for a regeneration scheme in west London, and another for the Docklands Light Railway Accelerated Growth Programme.

The accelerated growth programme will see improvements to the DLR around the Isle of Dogs and Royal Docks, two of London’s “Opportunity Areas”. These are areas of brownfield land earmarked by the mayor of London as having the capacity for significant development.

The GLA bid for money from the HIF’s Forward Fund – money which is set aside solely for high-impact infrastructure schemes.

The DLR growth programme will see a redevelopment of the Poplar depot, to include a new housing development over the depot and new bridge links over the Aspen Way.

As well as the 18,000 homes, some funding will go towards Transport for London to increase the capacity of the Beckton depot, buy 14 new trains, and build a DLR station at Thames Wharf.

Lucinda Turner, director of spatial planning at TfL, said: “We welcome this funding from the Housing Infrastructure Fund for improvements to the Docklands Light Railway, which will help enable 18,000 new homes to come forward in two of London’s largest Opportunity Areas, as well as support access to jobs all across east London.

“We will work with partners to progress the wider plans for this funding, which include purchasing additional trains, freeing up land around depots for housing as well as a significant contribution towards a new station in Thameside West.”

The growth programme is expected to start in January and be completed by March 2023. The GLA will submit a further five cases for funding from the Housing Infrastructure Fund in December.