The heads of planning at a City law firm and a property consultancy have warned against forcing house-builders to sell off undeveloped land with planning permission.

Treasury officials are considering a ‘use it or lose it’ policy on land owned by house-builders to help speed up the delivery of new homes. The idea was first put forward by former Labour party Ed Miliband in 2013, who wanted unused sites to be sold to councils.

But planning experts are calling on the Chancellor to reject the proposals and instead look at other measures to improve housing delivery.

Charles Mills, head of planning at Daniel Watney LLP, said: “The government is right to try and speed up the delivery of new homes, but interfering with the land market isn't the answer. Rather than penalising volume house builders, the government should be looking to diversify sources of housing supply, giving greater support to SMEs and also specialist build-to-rent developers, who can bring homes to the market far quicker than traditional for sale house builders.”

Marnix Elsenaar, head of planning at Addleshaw Goddard, said: “A large amount of undeveloped land is owned by the public sector but two thirds of it lies in areas that aren't particularly well-off. The solution here will be incentivising developers in non-affluent areas.”