Michael Gove will next week announce a relaxation of housing targets for local authorities in England, which developers worry will mean far fewer homes being built amid a housing crisis.
The housing secretary will outline the government’s new planning system and sources briefed on the plans said they would confirm he was giving councils far more freedom to set lower housing targets.
Gove is also expected to allow authorities to allocate less land to future development if local officials can argue that more development would damage the character of an area or require building on greenbelt land.
Gove first said he intended to make the planning changes a year ago after heavy lobbying from Conservative backbenchers, and especially Theresa Villiers, whom some critics have called the “nimby queen”.
One industry source said: “If the proposals are to be formalised, no matter how ministers try to package this, it is a capitulation to a nimby faction of the Conservative party.
“Removing the requirement for local housing needs assessments and allowing councils to build as few homes as they wish will see housebuilding in some areas collapse. The overriding outcome of these measures will be fewer new homes, worsening housing affordability and a huge loss of investment in jobs.
“Ministers seem intent on finding ways to prevent development, an approach that will have ramifications for many years and threatens to lock a generation out of home ownership.”
The Department for Levelling up, Housing and Communities did not respond to a request to comment.
The Conservatives promised in their 2019 manifesto to build 300,000 homes a year in England. Underpinning that pledge was a requirement for local authorities to set their future housing plans according to a formula that took account of expected population growth.
Last year dozens of Tory MPs, led by Villiers, threatened to amend the levelling up bill if Gove did not drop the mandatory requirements for councils, a move that in effect would mean the end of the 300,000 target.
Gove agreed to do so, publishing proposed changes to the national planning policy framework that would allow local authorities to treat the formula for setting housing targets as advisory rather than binding.
Under the changes, councils would be able to set far lower five-year plans than suggested by the population-based formula if they can show that meeting it would change the character of an area.
Since then, about 60 local authorities have withdrawn or delayed the publication of their housing plans as they wait for the new rules to be published.
Housing industry sources say they expect this to have a major impact on housebuilding over the next five years, with the House Building Federation predicting earlier this year that housebuilding would drop to its lowest level since the second world war.
Meanwhile, the Conservative government has not once hit the 300,000 new homes target. The most recent government figures show that 234,400 new homes were added to England’s supplies in 2022-23, almost exactly the same number as in the previous year. The number has never exceeded 250,000 in the three decades for which there are official statistics.
Experts say the numbers are likely to drop in this financial year. Data from the National House Building Council last month showed that the number of new home registrations in the three months to September dropped by 15% compared with the same period last year.
