Councils in England are being offered cash incentives in a bid to boost the number of houses being built.
Local authorities that support the construction of new properties will qualify for a bonus for every new home.
Under the plans, announced by housing minister Grant Shapps today, the Government will match the additional council tax raised by every new house built for the next six years – around £1,400 for a Band D home.
The New Homes Bonus, which will be introduced early in the Spending Review Period, is designed to address dwindling housebuilding numbers - currently at its lowest level since 1924.
Councils will be able to use the extra cash to fund either more frontline services, new playgrounds or council tax discounts for residents.
Mr Shapps said: “We will not tell communities how or where to build, or how they should grow. But the New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs.
“With housebuilding falling to its lowest level since 1924, action is needed now to build the homes the country needs. That’s why these new powerful incentives to build will be introduced early in the Spending Review period. And it’s why I have confirmed that those councils who go for growth by providing planning permission now will reap the rewards.”
Brian Berry, director of external affairs at the Federation of Master Builders described the move as ‘encouraging’ but warned that some councils might not be attracted to the extra money because of local opposition to new homes being built in their locality.
He said: “The problem is that everyone is agreed that more housing is needed but many are resistant to having these homes near them. Somehow we need to ensure that all councils are persuaded of the merits of building new homes, and that they subsequently provide a sufficient supply of land to enable the house building sector to deliver for the future needs of the local communities they serve.
“We have seen time and time again that communities that do not provide housing which is accessible to the young see them move away and when they go they take the futures of local businesses and services with them.”
A consultation paper on the final scheme will be published following the spending review on 20 October.