Giving up mandatory housing targets will harm SME developers and condemn another generation to ‘housing misery’, the National Federation of Builders, NFB, has warned.

The trade body said compulsory targets had allowed councils to concentrate on sites that could easily be delivered which had helped local SME builders. It claimed that making the targets negotiable would lead to councils concentrating on high-volume sites which take longer to happen.

National Federation of Builders, NFB, housing and planning policy head Rico Wojtulewicz said: “We were led to believe that Mr Gove was appointed to ensure Robert Jenrick’s ambitious planning reforms were not lost, yet his first move was to water them down so much that disgruntled Conservative MPs were given a platform to further derail vital change.”

Housing secretary Michael Gove struck a deal earlier this week with senior MPs in his party where councils can build fewer homes if they can prove hitting targets would significantly change their area’s character.

Currently, each local authority is set a target based on housing needs and their progress is monitored annually through housing delivery tests.

“By ending mandatory housing targets, the Government has signalled an end to its housing ambitions and placed backbench MPs’ careers before the national interest. The housing crisis is going to get worse,” said Mr Wojtulewicz.

The Home Builders Federation, HBF, agreed describing the new stance on building 300,000 new homes a year by the mid-2020s as ‘vague’.

HBF communications director Steve Turner said: “If ministers fail to stand up to the anti-business and anti-development section of the Conservative party it is inevitable that housing supply will fall dramatically, costing hundreds of thousands of jobs, slashing gross domestic product and preventing even more people from accessing decent housing.”