THE Conservatives abandoned their traditional defence of the green belt yesterday and promised a programme of house building for first-time buyers.

In a speech that ignored much of last year’s election manifesto, George Osborne, the Shadow Chancellor, said that he would change the tax regime, planning system and supply of public housing to increase the number of affordable homes.

In 2005 the Tories said that they would oppose all of John Prescott’s homebuilding plans in the South East and establish more green belts with even tighter planning regulations. Although popular with traditionalists, the policy was a turn-off for young families looking for affordable homes. In an attempt to revive the spirit of Margaret Thatcher’s “homeowning democracy”, Mr Osborne said that the party would help first-time buyers.

“I want the modern Conservative Party to become again the champion of affordable and sustainable homeownership,” he told a housing industry conference in South Wales. “I want us to look afresh at the planning system, and tackle the delays and obstruction that is damaging the the affordability of our housing.” He said that only 37 per cent of households could afford to buy their own home today, compared with 46 per cent in the late 1980s.

The Conservatives would change the definition of a greenfield site in a review of the planning system. Local communities would be given a greater say in development, as long as they took proper account of the needs of homeowners of the future. Mr Osborne also promised a programme to rejuvenate the “decaying suburbs” of Britain. He stopped short of welcoming Mr Prescott’s plans for thousands of new homes in the South East. Instead, he criticised the creation of top-down targets in Whitehall, saying that they were certain to provoke hostility in the communities designated for more housing.

Turning to the tax system, Mr Osborne said that the fourfold increase in stamp duty had damaged liquidity in the housing market. New shared equity schemes, though welcome, were mostly restricted to public sector workers. The Tories would introduce much more ambitious shared-equity plans for first-time buyers, he said.

Mr Osborne also criticised Gordon Brown’s handling of new investment vehicles for housing. Commercial property owners are keen for real estate investment trusts (Reits) to be introduced. These are tax-efficient savings vehicles that give savers a way to invest.

The Treasury’s plans include tight restrictions on Reits, which has created concern in the property industry. Mr Osborne called on the Chancellor to listen to the concerns of the industry and change his plans.

Adam Sampson, director of Shelter, the homelessness charity, said: “With record levels of homelessness and chronic levels of overcrowding, this cross-party agreement can’t come a moment too soon.”

The Audit Commission will say today that Mr Prescott’s building programme may be under threat because of a critical shortage of skilled planners. The watchdog claims that, unless local councils use private sector consultants, they may be unable to meet government targets for regeneration in the North and an extra 200,000 houses in the South.

Rising wages, static house prices and a recent drop in interest rates have helped to make mortgages more affordable recently. The Woolwich reported yesterday that the average homeowner in England and Wales saw the cost of servicing a mortgage fall by 0.2 of one percentage point in January to an average of 18.4 per cent of their take-home pay. Mortgages are at their most affordable level since July.

However, homeowners hoping for another short-term boost to their budgets from the Bank of England are likely to be kept waiting a bit longer, as the Bank is expected to announce that base interest rates will stay on hold at 4.5 per cent.

Analysis

What is going on with house prices? Click here to find out