Figures show housebuilding stalling despite planning permission being granted.
Large British developers have been accused of holding back supply of new homes to keep house prices high.
Some smaller developers went bust as a result of the financial crisis, so the market is now dominated by a small number of big companies who are reluctant to majorly increase the number of new builds, critics from both the Conservative and Labour parties say.
Figures from the Local Government Association show that planning permissions has been granted for a record 475,647 homes in England which are yet to be built. It’s quite a jump from 2012-2013 when the total was 381,390.
Rates of planning permission for new homes have increased by 60% since 2010, the year the Conservative-Liberal Democrat Coalition Government came to power.
What’s more, the length of time it takes for developers to complete a house has risen from 24 to 32 weeks.
Taking action
Ministers could force developers that buy publicly-owned land to commit to rapid construction as part of the planning process.
Measures such as imposing Council Tax on plots that have been granted planning permission have been ruled out as it could be seen as counter-productive. Instead, the Government may try to split up sites among rival developers to increase building rates.
The Government has promised to build one million new homes by 2020. George Osborne has also pledged another £7 billion with the aim of building 400,000 affordable new homes.
A spokesman from the Home Builders Federation said that the most recent Government figures show that there were 170,690 net additions to the housing stock during 2014-2015, an increase in almost 25% on the previous year. He blames the planning systems of local and central Government for the shortfall in housing.
Barratt Developments, Taylor Wimpey, Berkeley Group, Bovis Homes and Redrow are among the biggest developers in the UK.
Taylor Wimpey announced a record operating profit margin of more than 20% yesterday as it sold more homes at higher prices. Its pre-tax profits have also increased by 40% in the past six months to nearly £300 million.
Looking for a mortgage? Compare costs at a glance
What you should read next:
9 surprising things that will be cheaper in March
Millions hit by this BILL SHOCK