Planning restrictions on home and business extensions are to be eased by the Government as part of a package of measures to help kick-start the economy, David Cameron and Nick Clegg are due to announce.

The coalition Government wants to make it easier for tens of thousands of families and companies to expand their properties, giving a much-needed boost to economic activity.

Another 16,500 first-time buyers are also to receive help getting on the housing ladder under an extension of the FirstBuy scheme to be announced by the Prime Minister and his deputy.

Would-be homeowners without a deposit are given an equity loan of up to 20% of the purchase price under the scheme.

The Prime Minister will say: "This Government means business in delivering plans to help people, build new homes and kick-start the economy. We're determined to cut through the bureaucracy that holds us back. That starts with getting the planners off our backs. Getting behind the businesses that have the ambition to expand. And meeting the aspirations of families that want to buy or improve a home."

Homeowners and businesses will, for a limited time, be able to build much bigger extensions without planning permission than at present, under the changes to be unveiled. The new Permitted Development Rights will make it easier to install conservatories and loft extensions without going through weeks of planning bureaucracy and form-filling.

Mr Clegg defended plans under the package to relax the requirement on developers to provide a proportion of affordable homes in any development. They will no longer have to wait five years to apply to change the terms of planning permission granted on what are otherwise deemed "commercially unviable" sites.

But the Deputy Prime Minister insisted that the change would be more than compensated for by extra Government investment to support the building of more affordable homes. Treasury funding of £300 million has been found to help provide up to 15,000 such properties and bring 5,000 empty homes back into use, Downing Street said.

And new legislation will provide Government guarantees of up to £40 billion of major infrastructure projects and up to £10 billion of new homes, including a move to guarantee the debt of housing associations and private sector developers.

Mr Clegg said of the change in social housing restrictions: "Instead of having developers sitting for five years on useless land where nothing has happened, no young people are being employed on construction sites, no affordable homes are being built, no new houses are being built for first-time buyers, we are saying 'Let's undo that knot at an earlier stage'. Our calculations are that there are some sites where they will be able to proceed without building affordable homes. That is why we are putting up £300 million to more than make up for any loss. The net effect of all of these proposals, let me be very clear, is more, not less, affordable homes."