A report by an international organisation of industrialised states has identified England's green belts as a 'major obstacle' to development that should be replaced.
The study, published today by the Organisation for Economic Cooperation and Development (OECD), says that the response of housing supply to demand in the UK has been "one of the lowest among OECD countries over the last 20 years".
"Making the land-use planning system more flexible, more predictable and more responsive to market signals, without compromising its social and environmental objectives, is essential," the report says.
The OECD study says that, in England, green belts "constitute a major obstacle to development around cities, where housing is often needed".
It adds: "Replacing green belts with land-use restrictions that better reflect environmental designations would free up land for housing, while preserving the environment."
The report also says that it remains to be seen whether the New Homes Bonus – an incentive through which the Government will match the council tax raised on each new home built for six years – "will be sufficient to generate numbers of planning permissions compatible with increasing demand".
It adds that, following the coalition’s removal of the regional tier of planning, "ensuring the continuity of strategic planning of infrastructure and public services" is crucial.
Chancellor George Osborne said: "On the housing market, the OECD survey identifies the planning system as a major obstacle to the construction of new homes and a more stable housing market.
"They support our abolition of the top-down system that has failed.
"But they also point out that we should do more to make sure housing supply keeps up with demand, for example by making the land-use system more flexible and providing even better incentives for local communities to allow development.
"I very much agree."