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The chief executive of George Wimpey this week warned the government that its plans to increase housing output by thousands of homes a year were unrealistic.

Peter Johnson said the planning system, rather than the slowing housing market, was the main obstacle to the government鈥檚 aim of increasing housing supply to 10,000 homes a year.

He added that proposed changes to the planning system were well intentioned but would not deliver the changes required.

Johnson, who made his comments on Tuesday at the Housing Market Intelligence 2004 conference, said that land shortages and planning delays were driving companies to rethink their business strategies. He said the government was not doing enough to address the problems.

He cited the decision by the Berkeley Group to reinvent itself as a regeneration specialist rather than a volume housebuilder as one response to tougher conditions.

He said: 鈥淣ot for the first time Tony Pidgley [Berkeley鈥檚 group managing director] has put the cat among the pigeons. His decision has implications for us all. Our shareholders are watching.鈥�

Johnson said he would tweak his existing business rather than following Pidgley鈥檚 strategy.

Tony Pidgley's decision has implications for us all

Peter Johnson, George Wimpey

鈥淲e will focus on margins and not aim to grow at all costs,鈥� he said. 鈥淲e have to adapt the business. Now is the time to show the world we can operate in difficult times.鈥�

He added that communication between industry and the government had to improve.

He said: 鈥淥ur role must be to help not heckle the government. We need to advise it so that what it does has the effect it intends.鈥�

Kate Barker, an economist who produced a review into housing supply in February, also spoke at the conference. She said the planning system needed to move closer to the market.

The government is to ask every local authority in the UK to set regional affordability targets by the end of 2005.