Harrow Borough Council is to receive £2.7 million this year to encourage it to support housebuilding in the borough.
The money will come from central government as part of the New Homes Bonus scheme.
MP for Harrow East, Bob Blackman said: “This is good news for the residents of Harrow and proves that the system set in place by this government is working.
“The grant will provide Harrow Council with the resources to make improvements to local infrastructure.
“The incentive is clearly encouraging house building, and encouraging the provision of affordable homes – both of which Harrow needs.”