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A major overhaul of housing and planning policy is needed to ensure young people can afford to live in the rural areas where they work, a new report has said.

The review, written by Liberal Democrat MP Matthew Taylor at the request of the prime minister, said planning authorities should not rule out development in villages on the basis of lack of amenities without looking at the needs of the place and consulting local people.

The report said planners should have a 鈥渄uty to respond positively鈥� if a parish council backed an affordable housing development on an exception site, where housing is not usually allowed unless it is affordable and there are constraints on building in the areas. But he added that parishes could not veto plans.

Estate developments 鈥渄oughnutting鈥� market towns should be avoided and new neighbourhoods including shops, workplaces and community facilities should be provided instead, he recommended.

He said landowners might be more likely to sell plots for affordable housing if they could nominate a family member of employee for some of the property. Covenants could ensure the homes remained affordable.

The review said the rural population had grown by 800,000 driven by people moving there from the cities. This had pushed up house prices, forcing young families to move away from the communities where they work. Wages in rural areas are a fifth lower than the national average but homes for first time buyers in the countryside cost 拢16,000 more than in urban areas.

Taylor said: 鈥淚f we fail to build the affordable homes to enable the people who work in the countryside to live there, we risk turning our villages into gated communities of wealthy commuters and the retired. In many cases just a handful of well designed homes, kept affordable in perpetuity for local people, will make all the difference to the sustainability of a village and its services.鈥�

The report was welcomed by housing minster Caroline Flint. She added that the government would consult in the summer on other measures to support community land trusts, which own land for the benefit of local people.

The Conservatives opposed the report's suggestion of planning rules limiting the number of second homes. They said it would make the properties harder to sell and would prompt price increases amongst second homes as they became scarcer.

The Chartered Institute of Housing welcomed the review, which took up many of its recommendations. Chief executive Sarah Webb said: 鈥淐IH is pleased to see that the Taylor Review has a more sensitive interpretation of what sustainability means in rural areas. Rather than blocking the building of new homes in a village on the basis of its lack of services, we should work closely with local people to assess how a housing development could add to or diminish the sustainability of the community. In many cases we should consider building homes to attract families, shops, schools, transport and the wider economy back into rural areas and ensure they have a long-term future."

Listen to an interview with Matthew Taylor by clicking on the link below