Ministers would also get powers to seize disused land, while major housing projects could be fast-tracked, and rules on extensions in London relaxed.

Chancellor George Osborne said reforms were needed because Britain had been “incapable of building enough homes”.
It follows a warning this week’s Budget would cut investment in new homes.

The proposed changes feature in a 90-page document to address Britain’s productivity record, to be released later.
It is aimed at boosting British workers’ output levels, which experts say lag behind other leading nations – an issue dubbed the “productivity puzzle”.

The chancellor’s Fixing the Foundations package has been billed by the Treasury as the second half of the Budget.

Upwards extensions

BBC political correspondent Ross Hawkins said Treasury sources argue house-building boosts productivity, as it is helpful to have workers living close to their workplaces.
Housing is just one part of a broad plan, they say.

The report also features proposals on higher education, transport, devolution of powers to cities and trade.

George Osborne says reforms are needed to planning laws so more homes are built.

Under the new proposals – which will need to be approved by MPs – automatic planning permission would be granted on all “suitable” brownfield sites under a new “zonal” system, the Treasury said.

The term brownfield refers to land that has previously been developed but is vacant or derelict.

Another change would see ministers seek to scrap the need for planning permission in London for developers who want to extend buildings to the height of neighbouring properties.
Planning powers will be devolved to mayors in London and Manchester, while enhanced compulsory purchase powers will allow more brownfield land to be made available for development.

There would also be new sanctions for councils that do not deal with planning applications quickly enough, and the government would be able to intervene in councils’ local development plans.

House prices

This week, the Office for Budget Responsibility warned government plans for rent reductions in social rented homes would hit housing investment.

The OBR said 14,000 fewer affordable homes would be built and cut its forecast for investment in private housing by 0.7%.

It also said house prices were expected to rise compared with both consumer prices and household incomes.

A Treasury source said the OBR assessment considered only the impact of the Budget and did not reflect the new policy.
In his Mansion House speech in June 2014, Mr Osborne said 200,000 permissions for new homes would be made possible by 2020 as councils put in place orders to provide sites with outline planning permission.

Housing ladder

The Treasury said the new plan went further – in effect stripping away the need for any planning permission in some brownfield locations.

The Conservative manifesto pledged to “ensure that 90% of suitable brownfield sites have planning permission for housing by 2020”.

In a statement released before the publication of the productivity plan, Mr Osborne said: “Britain has been incapable of building enough homes.