Mr Osborne said Government figures showed that 60,000 people a year move from urban to rural areas and said it was crucial to support the increasing economic diversity in the countryside.
Writing in the Telegraph alongside Environment Secretary Liz Truss, Mr Osborne insisted that green belt land would be protected but he will open up greenfield areas to the scheme, which was previously designed for brownfield land.
The pair wrote: "The flight from city to country is driven by all sorts of factors: a desire for more space for children to grow and play or an 'escape to the country' in retirement, for example.
"But there is another reason more people are able to base themselves in our beautiful regions and enjoy the high quality of life they offer – one that we believe is critical.
"Improvements in information technology mean a broader than ever choice of career for those in rural areas.
"Simply, our rural areas are becoming ever more economically diverse and dynamic.
"Long gone are the days when those in a village had to choose between a job in the pub, the shop or on the farm, or commute into a town or city."
They added: "We'll always want to protect our green belt and beautiful natural environments, but the lack of housing in rural areas is a scandal."
More on AOL Money:
Where are the nicest places to live?
'Housing crisis' as rising population ramps up pressure on homebuilding
Former council flat in Covent Garden, London sells for £1.2 million