Councils to blame for 'chronic' shortage of homes, says builder

The head of one of Britain's biggest housebuilders launched a scathing attack on the country's planning system yesterday, blaming it for the "chronic" shortage of new homes.

Iain Napier, the chief executive of Taylor Woodrow, said lack of consistency from one local authority to another had helped create a situation where 50,000 too few houses were being completed each year.

Mr Napier stopped short of directly blaming Ruth Kelly, the minister responsible for local government and housing, for the shortfall. He said there was a complete failure to turn policy into concrete action. He said that two years after the Barker Report was published, advocating changes to the planning regime, "zilch" had been implemented.

Mr Napier added that neither of Ms Kelly's two predecessors in the job, Yvette Cooper and John Prescott, had been able to get to grips with the problem either.

Mr Napier said a "good" council will approve a project within a year or less, but other councils can take up to three years. "Planning is getting more difficult. It leaves housebuilders in a terrible predicament," he said, adding that despite the efforts of the UK Government to speed up planning approval over the past two years, time frames are "exactly the same, if not worse".

His criticisms came as Taylor Woodrow, the UK's fourth largest housebuilder, reported a 6 per cent decline in profits for the first half of the year. However, the lower UK margins were partially offset by the house-builder's largest-ever profit in the US.

Taylor Woodrow reported a decline in pre-tax profit to £160.8m over the period as the company took on more low-margin work. Nevertheless, its UK business recorded a 5 per cent increase in home completions. Taylor Woodrow constructs about 10,000 homes a year in the country and is currently building flats as part of the Glasgow Harbour regeneration project.

But Mr Napier said he expects to make modest progress in UK volumes and profitability this year after its order book increased to £649m over the first half. However, he warned that its year-end order book is likely to suffer from the company's greater exposure to low-margin housebuilding.

Citigroup raised its price target on the stock to 467p from 395p, arguing it does not expect a crash in the UK housing market unless there is a steep rise in unemployment levels.

The company's frustration in the UK was offset by a record performance in North America, where profit increased 29 per cent to £96m.