Tory housing plans branded 'madness'

Prime Minister David Cameron launched the proposals he said would deliver 70,000 new homes and create 140,000 jobs.

He trumpeted what he branded a £40 billion guarantee for major infrastructure projects and £10 billion for new homes as a lifeline to the flagging construction sector.

The government will also offer 16,500 people taxpayer-funded loans of up to 20 per cent of a house purchase price so that they can borrow more money from banks in the form of a mortgage.

And the small print included plans to relax rules on section 106 of planning applications that require developers to build new social housing, meaning many schemes will be given the green light without any of these kinds of properties being built.

And the emphasis was on "affordable" housing - close to market rental rates - rather than low-rent social housing.

Ucatt warned that the package represents an attack that will worsen the housing crisis.

General secretary Steve Murphy said: "The move to reduce the building of social homes for rent is madness.

"This sector has seen the greatest fall in output in recent months and this is directly a result of government policies.

"There are five million people on housing waiting lists - we should be examining every possible measure to increase social house building not cutting it."

The government is also proposing to slash "unnecessary red tape" to make it easier for homeowners and businesses to build extensions up to eight metres long and loft conversions without requiring full planning permission.

Currently house owners are restricted to add-ons of around four metres without having to gain permission.

Mr Murphy said the relaxation of planning laws would simply increase the number of neighbour disputes.

It would only boost the construction industry at a very local level, he added.

"Tinkering around the edges is not going to return the industry to growth," Mr Murphy added.

Under the plans it is estimated that up to 15,000 "affordable homes" and 5,000 empty homes will be brought back into use as well as an additional 5,000 homes built for rent at market rates.

But Labour MP and chairman of the Commons Council Housing Group Austin Mitchell branded the figures represent a "weak" attempt to deal with Britain's housing shortage which requires 240,000 homes a year.

He said: "What's most needed is the mass building of public housing not this bonanza for developers and the private rental market.

"Nothing sustainable will come from these plans."