'Do your duty to Britain', Theresa May tells property developers in major speech on 'restoring dream' of home-ownership

Theresa May will announce plans to penalise property developers who do not build homes quickly enough, as she uses a major speech to warn housebuilders they must “do their duty to Britain”.

The Prime Minister will criticise developers who profit from building expensive properties rather than the quantities of new homes the country needs, telling them it is time to “step up do your bit”.

She will vow to “rewrite the laws on planning” in order to help more people get on the housing ladder.

The Government will also adopt a tougher approach to local councils, including setting targets on how many homes each authority needs to plan for.

Key workers such as nurses, teachers and firefighters should be the priority for affordable homes, Ms May will say, and local authorities will be given powers to implement this.

The speech marks another strand of Ms May’s attempt to flesh out a domestic policy agenda that goes beyond Brexit. Last month she delivered a keynote education speech promising to review how universities are funded.

However, opponents said the “feeble” changes had already been announced in the Government’s housing white paper, published last year.

They are also likely to demand the Government make more funding available or allow councils to borrow more to invest in housing. Town halls have long insisted that restrictions on their ability to borrow to fund new homes is the biggest barrier to housebuilding.

Questions are also likely to be raised over the future of Starter Homes – one of the Government’s flagship policies for boosting home-ownership. The Independent revealed late last year that not a single one of the properties, which will be sold to first-time buyers at a discount, has yet been built.

Accepting the failings of current housing policy, Ms May will say “for decades this country has failed to build enough of the right homes in the right places”.

She will once again place housing at the heart of her agenda, saying: “We cannot bring about the kind of society I want to see unless we tackle one of the biggest barriers to social mobility we face today: the national housing crisis.”

The Prime Minister has previously said she will make tackling the housing crisis her “personal mission”.

Speaking at a planning conference in London, she will argue that “in much of the country, housing is so unaffordable that millions of people who would reasonably expect to buy their own home are unable to do so” because the “failure to match demand with supply really began to push prices upwards”, and also drove up rents.

“The result is a vicious circle from which most people can only escape with help from the bank of Mum and Dad. If you’re not lucky enough to have such support, the door to home-ownership is all too often locked and barred,” she will say.

Recounting her own experience of buying a home, she will add: “I still vividly remember the first home I shared with my husband, Philip. Not only our pictures on the walls and our books on the shelves, but the security that came from knowing we couldn’t be asked to move on at short notice.’

“And because we had that security, because we had a place to go back to, it was that much easier to play an active role in our community. To share in the common purpose of a free society.”

“That is what this country should be about – not just having a roof over your head but having a stake in your community and its future.”

Ms May will take a tougher line against private developers, criticising the “perverse incentive” that allows property executives to profit from building expensive homes rather than greater numbers of affordable ones.

She will suggest a company’s past record of delivering affordable housing should be taken into account when it bids for planning permission for new properties.

She is expected to say: “The bonuses paid to the heads of some of our biggest developers are based not on the number of homes they build but on their profits or share price.

“In a market where lower supply equals higher prices that creates a perverse incentive, one that does not encourage them to build the homes we need.

“I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.”

The Prime Minister will also point out that developers have failed to build thousands of homes that have been given planning permission, warning that “the gap between permissions granted and homes built is still too large”.

Analysis by the Local Government Association (LGA) earlier this year revealed 420,000 homes that received planning permission last year are still waiting to be built.

Calling on private housebuilders to “step up and do their bit”, Ms May will say: “I expect developers to do their duty to Britain and build the homes our country needs.”

Sajid Javid, the Housing Secretary, has already hinted the Government is considering giving councils “use it or lose it” powers to take land away from developers who are refusing to build homes on sites they own.

Ms May will also criticise David Cameron’s legacy, saying her predecessor had presided over “a great and welcome increase in the number of planning permissions granted” but not “a corresponding rise in the number of homes being built”.

Although the Prime Minister will announce that 80 proposals from the Government’s housing white paper will be implemented, housing insiders will be watching closely to see what type of housing the Government will prioritise and whether any new funding will be made available.

Since 2012, the Conservatives have prioritised the more expensive “affordable housing” over social housing, leading to the loss of hundreds of thousands of the cheapest homes.

Ms May is also likely to face calls to reverse some of the provisions of the Housing and Planning Act 2016, which forced councils to sell off social homes and extended the controversial Right to Buy to housing association tenants. The scheme is another leading cause of the fall in the number of low-cost homes.

John Healey, Labour’s Shadow Housing Secretary, said: “The Prime Minister should be embarrassed to be fronting up these feeble measures first announced a year ago. After eight years of failure on housing it’s clear her Government has got no plan to fix the housing crisis.

“Since 2010, home-ownership has fallen to a 30-year low, rough sleeping has more than doubled, and deep cuts to housing investment have led to the lowest number of new social rented homes built since records began.

“This housing crisis is made in Downing Street. It’s time the Tories changed course, and backed Labour’s long-term plan to build the genuinely affordable homes the country needs.”

The Prime Minister was also warned by Conservative peer Lord Porter, who chairs the LGA, that planning changes would be largely meaningless without new funding.

He wrote on Twitter: “If we want more houses, we have to build them, not plan them.

“The [Housing Department] need to push back against [the Treasury] or the nonsense will go on and nothing will change. Less homes built next year than there were this year.

Ms May will insist that building on green belt land is not the answer to tackling the housing crisis. She will instead announce new protections for woodland and coastlines.