Osborne promises “urban revolution” on housing

Councils will be ordered to designate more than 90 per cent of brownfield sites that are suitable for housing as open for development.

The move effectively means authories will only have a say in what type of housing goes on each site, rather than whether development goes ahead at all.

The Chancellor described the move as an “urban planning revolution” in his Mansion House speech to City of London leaders tonight.

Mr Osborne insisted that recent spikes in house prices were not an immediate risk to the economy and rejected criticism that the Government’s ‘Help to Buy’ scheme is helping to fuel house prices.

But he conceded housing could pose a “long term problem” and action was needed to ensure supply meets demand.

If “beautiful landscapes” are to be preserved for future generations, he said, “we must make other compromises”.

“I will not stand by and allow this generation, many of whom have been fortunate enough to own their own home, to say to the next generation: we’re pulling up the property ladder behind us.

“So we will build the houses Britain needs so that more families can have the economic security that comes with home ownership,” he said.

The measure was one of several unveiled in the speech including new powers for the Bank of England to limit the number of risky mortgages given out by banks.

If the Bank becomes concerned about a housing bubble, it will also be able to impose limits on the loan-to-value ratios offered on mortgages.

In the wake of the LIBOR rate-fixing scandal, the Chancellor announced a review of the way market benchmarks in the City are regulated.

And he promised “tough new domestic criminal offences” for traders found guilty of financial market abuses and to resist European regulation..

The Chancellor trumpeted the City’s success in becoming a centre for Chinese financial services and announced plans for the UK to be the first western nation to issue an Islamic bond.

“I want Britain to be not just the western hub of Chinese finance – but of Islamic finance too,” he said.

In a nod to the upcoming independence referendum, Mr Osborne said Edinburgh’s reputation for financial services was strengthened by being in the United Kingdom.

Shadow Chancellor Ed Balls dismissed his opposite number’s measures to increase housing supply.

“George Osborne is still failing to tackle the root cause of the housing crisis which is that we are not building enough homes to match rising demand.”

The Morley and Outwood MP added: “Over the last few years Labour has repeatedly called for action on housing supply, but the Chancellor has failed to act. Under this government housebuilding has reached the lowest peacetime levels since the 1920s.

“And the danger of the Chancellor’s failure to act on housing supply is that we see a premature rise in interest rates to rein in the housing market which ends up hitting millions of families and businesses.

“You can’t deal with the cost-of-living crisis and create a strong and balanced recovery without building more homes.”