Housebuilding to hit new heights

Fines for councils that block or delay new homes, automatic approvals for brownfield sites and new compulsory purchase powers are among other reforms, according to The Times.

George Osborne last night squared up for a fight over a new drive to increase housebuilding, saying that Britain had so far been “incapable” of addressing its chronic shortage of homes.

Key Conservative policies such as extending the right to buy and discounted starter homes for young first-time buyers depend on rapid growth in housebuilding to address Britain’s chronic shortage.

The need to ramp up the supply of new homes was made more urgent still by this week’s budget, which cut housing associations’ income by imposing a four-year limit on social rents.

Previous planning liberalisations to kick-start construction encountered heavy opposition from countryside campaigners, some Tory MPs and Conservative-controlled councils in the previous parliament. About one in five local authorities has yet to meet a commitment to earmark land for new developments.

Speaking before publication of the reforms, the chancellor said he was ready to return to the fray. “Britain has been incapable of building enough homes. The reforms we made to the planning system in the last parliament have started to improve the situation — planning permissions and housing starts are at a seven-year high. But we need to go further and I am not prepared to stand by when people who want to get on the housing ladder can’t do so.”

One of the most eye-catching moves is a consultation with Boris Johnson, the London mayor, on upward extensions. Homeowners could be spared having to gain planning permission as long as they do not build above the level of the neighbouring property.

The planning reforms are outlined in a “productivity plan”, billed by Treasury aides as a second budget, published today, setting out measures to improve Britain’s output per worker, which is behind that of other countries.

Reforms to inheritance tax, one of the other key housing measures in the budget, was yesterday judged likely to drive up house prices. Paul Johnson, of the Institute for Fiscal Studies, said the new allowance “will add yet further to the generous treatment of owner-occupied housing”.

Official figures show that Britain built 118,760 homes in the UK last year, fewer than half the 240,000 the industry says is vital in order to begin to address the country’s chronic supply shortage.

This is pushing up prices to unsustainable levels and blocking more would-be buyers from stepping on to the property ladder, despite several record low mortgage rates on offer.

Soaring prices as a result of a supply shortage in the UK were highlighted earlier this week when Halifax said that the average cost of a home in the UK unexpectedly jumped 1.7 per cent last month, breaking through the crucial £200,000 threshold for the first time.

The lender’s data came as the Royal Institution of Chartered Surveyors warned that the average stock of homes per surveyor reached a record low since the body started collating such data in 1978.

The institution said that it was hardly surprising that as a result prices across much of the country were continuing to be squeezed higher, with property set to become ever-more unaffordable.