Coalition ditches red tape in bid to create house building boom

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The Prime Minister shrugged off concerns about the impact of his Government’s latest planning shake-up as he pledged to empower developers and under-write major projects to boost the UK’s flagging economy.

David Cameron said yesterday he would “get the planners off the backs” of businesses and families who want to extend their properties or begin major development projects, by slashing the regulation he believes has been holding back building work.

“Let’s get Britain building,” he said, claiming the measures will deliver 70,000 new homes and 140,000 extra jobs. “That will help to get Britain working.”

In addition to plans to make it easier to build extensions, the Government will also provide loans to first-time buyers and underwite large developments with £10bn of guarantees.

Ministers will also allow developers to ditch plans for affordable homes if they are making sites “commercially unviable”.

Some Labour MPs warned that allowing developments to go ahead without social housing would be a retrograde step.

Deputy Prime Minister Nick Clegg insisted, however, the change would be more than compensated for by extra Government investment of £300m to support the building of more affordable homes. “There are some sites where they will be able to proceed without building affordable homes,” he said. “That is why we are putting up £300m – to more than make up for any loss.

“The net effect of all of these proposals is more, not less, affordable homes.”

Labour dismissed the impact the proposals will have on the wider economy.

Shadow Shief Secretary to the Treasury Rachel Reeves, the MP for Leeds West, said: “With our economy in a double-dip recession and a serious housing crisis, the Government are kidding themselves if they think these announcements are up to the scale of the challenge.”

But business leaders and house-building organisations have welcomed the proposals, which they said would throw the shackles off developers and allow them to begin work on stalled projects.

David Orr, chief executive of the National Housing Federation, which represents England’s housing associations, said: “This stimulus package is a major step forward. The Government’s £10bn financial guarantees, together with the extra £300m for affordable and empty homes, has the potential to transform the housing market.”

John Walker, national chairman of the Federation of Small Businesses, added: “Relaxing planning rules will certainly be welcomed by many small firms.”

Several local authorities have warned the planning system was not the problem, with developers sitting on huge banks of land where permission has already been approved. Speaking in a debate on Wednesday night, Elmet and Rothwell MP Alec Shelbrooke said incentives are needed to encourage house-builders to develop brownfield sites rather than Yorkshire’s untouched countryside. We have a real situation in our city of Leeds, where there is pressure on the greenfield and the green belt, even though 24,000 approvals have been made for brownfield sites,” he said. “This is putting huge pressure on the local communities.

“Regeneration is not happening because developers can make a huge amount of money and make vastly greater profits by coming out into my constituency, which is on the edge of Leeds, and building four or five-bedroom houses on greenfield sites, where there is a premium attached because of the countryside views.

“We need to be more proactive in incentivising house builders not only to get building, but to do so where we want them to build.”