The temporary measures mean householders and businesses will be able to build extensions on their properties without having to go through complex planning permissions.
It will mean detached homes can build extensions up to 8m long while other houses will be able to build extensions up to 6m.
Labour criticised the plans suggesting the coalition is “kidding themselves” while the Local Government Association published figures showing a backlog of 400,000 prospective homes with planning permission which have not yet been built.
It said the numbers were conclusive proof that planning isn’t what is stopping people from building.
The Prime Minister has also announced that a further 16,500 first-time buyers will get help getting on the housing ladder under an extension of the FirstBuy scheme.
Jonathan Harris, director of mortgage broker Anderson Harris, said planning isn’t the issue, for most people it's lack of finance to pay for building work.
He said: “It's all well and good suggesting that the answer to the housing crisis is to extend existing properties but unless you have got the £20,000 upwards to pay for it sitting in your bank account, there could be funding issues.
“Lenders will look at the overall loan-to-value once the extra funding is factored in: higher than 75% and the lender may well refuse the extra borrowing. So those borrowers with plenty of equity in their homes may be ok, but those who have a high LTV already may struggle.”
Sam Busfield of Loans Warehouse, the specialist secured loan broker, suggested a secured loan may be a suitable alternative.
He said: “With interest rates at all-time lows, many homeowners will have taken advantage of some of the cheap fixed-rate mortgages on offer and not want to change their main mortgage again. A secured loan could be the answer for those borrowers looking to stay in their homes for longer and improve rather than move.”
The planning proposals will undergo a month long consultation before implementation later in the year.
