Peers recommend increased planning fees and unfinished developments tax

In its Building More Homes (103-page  / 1.8 MB PDF) report the committee said evidence suggested the government's target was insufficient and "at least 300,000 homes a year need to be built for the foreseeable future".

Its suggestions for meeting the revised target included allowing local planning authorities to increase their planning fees, levy council tax on incomplete homes and borrow more money to build social housing.

The report was critical of the government's focus on home ownership and its reliance on private house builders to meet the country's demand. It said local authorities and housing associations should be "incentivised and enabled to make a much greater contribution to the overall supply of new housing".

To address resourcing and funding issues at councils, the committee recommended that they be allowed to "set and vary planning fees in accordance with the needs of their local area". It said the upper cap on fees charged should be "much higher" than at present. It also recommended that "arbitrary and anomalous" restrictions on councils' borrowing to build social housing should be lifted.

The report identified a "large gap" between the number of homes granted planning permission and the number of homes being built. It said one reason for this disparity was the restriction of building rates by large house builders in order to maximise their profit margins. To address this problem, the committee said councils should be "given the power to levy council tax on developments that are not completed within a set time period".

The Committee's recommendations also included giving a senior cabinet minister overall responsibility for identifying surplus publicly owned land and co-ordinating its release for housing development. The report said the National Infrastructure Commission should oversee how many homes are actually built on public land and there should be a particular focus on the provision of low cost homes.

Planning expert Ben Mansell of Pinsent Masons, the law firm behind Out-Law.com, said: "Over the last decade, only once have more than 200,000 new homes been built in a single year in the UK. In that context, a target of 300,000 new homes can be viewed optimistically as challenging or pessimistically as unrealistic."

"The new-look government has identified housing as a priority issue and has said that it will be "very ambitious" in its plans for housing," said Mansell. "However, unfortunately the government has inherited a misfiring system which is not delivering enough housing and requires a significant re-think. Many sensible reforms are suggested within the House of Lords report, although whether the proposals are implemented and government rhetoric is turned into reality remains to be seen."