CHANCELLOR Gordon Brown called for an extra 50,000 homes to be built every year as fears grew over future public spending plans following his preBudget report on Monday.
Mr Brown admitted getting his headline figures wrong as the national growth rate for this year was halved from original estimates of 3.5 per cent to 1.75 per cent.
Contractors are now bracing themselves for public spending restrictions, but the Government is keen to encourage more house building.
Only 150,000 homes are currently built each year, too few to house the 190,000 extra households formed.
The Government wants to see 200,000 homes built per year by 2016.
Housing minister Yvette Cooper said: 'The evidence is clear ? if we fail to increase the number of new homes then within 20 years less than a third of 30something couples will be able to afford to buy a home of their own.' The announcement was in response to a review by Kate Barker of the Bank of England, commissioned by the Government, which found that current house building was inadequate.
The Government is consulting on a tax that will give councils some of the increase in land value when planning consent is granted. The Planning Gain Supplement will take over, although not completely replace, previous legislation.
Roger Humber, strategic consultant to the Housebuilders Association, said: 'Given that the introduction of such a tax will involve significant time and cost to legislate, we will be asking the Treasury to examine viable alternatives in the hope that a more practical outcome can be met.' A spokesman for the Home Builders Federation said: 'The HBF is keen to see a more efficient and more transparent system for planning obligations than the current Section 106 agreements.
However, it is crucial that any form of planning gain is proportionate and workable.
'There also needs to be a wide consensus in support of any future approach if it is to work.' Responses to the supplement are invited by the Treasury until February 27 2006.
Deputy Prime Minister John Prescott also announced the winners for four more sites in the £60,000 house competition on Tuesday. The Countryside Consortium, Westbury Homes and William Verry (for two sites) have all been selected by regeneration agency English Partnerships to build homes on the four sites. Preferred bidders for the remaining two sites are expected next month.
Construction will start next spring.