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Housing minister Grant Shapps is to rush out guidance to reward councils for allowing development, amid growing evidence that planning changes are slowing development.

Up to 40 councils have taken action to halt schemes, change planned housing numbers or delay planning inquiries since the government wrote to them two weeks ago effectively telling them to ignore regional plans, according to the House Builders Association (HBA).

In addition, at least two large developments involving 1,500 homes have been turned down as a result of the policy change.
Shapps told housing industry leaders on Tuesday that he would issue guidance within the next two months. He said he was committed to raising the supply of new homes, and was looking to 鈥渦se secondary legislation to introduce incentives to local authorities 鈥� within the next month or two鈥�.

Shapps declined to detail how he planned to introduce the incentives, but it is understood officials may change the rules governing councils鈥� financial settlements. These would reward councils for allowing development to occur, and would take effect from April next year.

Eric Pickles, the communities secretary, wrote to all councils on 27 May saying he intended to 鈥渁bolish regional strategies and return decision-making powers to councils鈥� and that councils could consider the letter 鈥渋n decisions they are currently taking鈥�.

Labour鈥檚 targets for housebuilding, which were opposed by many shire authorities, were contained within the regional strategies.
Roger Humber, strategic adviser to the HBA, said the letter had left a 鈥渂lack hole鈥� in policy. He said: 鈥淭he fear we all expressed that these policies would result in a return to nimbyism is turning out to be true.鈥�

A 1,200-home scheme called Hatchfield Farm near Newmarket was turned down last week by Forest Heath council, in part on the basis of Pickles鈥� letter.

A statement by Forest Heath said that 鈥渋n view of this [Pickles鈥� letter] and in advance of our forthcoming review of housing figures, it would be inappropriate to approve this application.鈥�

In addition, a 300-home scheme by Cala Homes in Moreton-in-Marsh, Gloucestershire, was turned down by Cotswold council after it decided to reduce its annual target from 345 homes to 300 on the basis of Pickles鈥� letter.

Roger Hepher, head of planning at Savills, said land deals were also falling through. 鈥淭hings are freezing over. We need the full picture as soon as possible.鈥�

Shapps said: 鈥淚 recognise the anxiety in the industry, but I can absolutely assure you we鈥檒l build more homes this way.鈥�
Meanwhile, Greg Clark, the minister for decentralisation, has laid out plans to stop back gardens being developed by removing their classification as brownfield land, and abolishing housing density targets.

Ian Baker, group managing director for housebuilding at Galliford Try Homes, said: 鈥淭his kind of development has been an important part of delivering housing in the South-east. It would be naive to think this ruling will lead to development on other brownfield land.