Planning checks 'forcing homes crisis'

Last year fewer homes were built than any time since 1924

Britain will suffer a housing crisis unless the planning system is reformed and demand for new homes is met, the House Builders Federation said.

A shortage of new homes could mean that house price inflation stays at its present high level.

Land with planning permission is very costly and as a result builders have to target the middle to top end of the market

Pierre Williams, House Builders Federation

Increasingly, many potential first-time buyers are finding that they can not afford to get a foot on the property ladder.

Last year the number of new homes built was the lowest for 77 years, the federation said.

About 168,000 homes were built last year, while the number of home seekers hit 220,000.

The region with the biggest shortfall was London, where 4.2% fewer homes were built than required.

There will be a shortage of 1.5 million homes by 2020 if this trend continues, the federation warned.

Planning problems

The federation claimed that builders were keen to meet the demand for new housing, but were being hampered by sluggish local authority planning departments and stringent greenbelt regulations.

"Instead of focusing on ending the right of local authority tenants to buy their homes, the government needs to make sure that the planning process is quickened up," federation spokesman Pierre Williams said.

Mr Williams said that difficulty in getting planning permission explained why many new builds were aimed at buyers looking to trade-up rather than make their first home purchase.

"Land with planning permission is very costly and as a result builders have to target the middle to top end of the market."

John Prescott, Deputy Prime Minister, announced last month that he would like to see the planning process speeded up and local authorities meet their targets for approving new builds.