Government plans to offer council tax incentives for house building have been welcomed by the New Local Government Network (NLGN).
The think tank has previously advocated financial incentives to encourage planning development and welcomed the government decision 'to use the carrot and not the stick to reward growth'.

Under the New Homes Bonus scheme the government will match the council tax raised on each new house for six years.

However NLGN questioned whether the additional money councils will receive - for every new home built the government will match the council tax raised on each new house for a period of six years - will be substantial enough to encourage significant growth.

It instead urges housing minister Grant Shapps to examine whether there should be a greater level of incentive for areas that have acute housing needs.

'The UK faces a critical housing shortage and today's announcement will go some way to empower councils to bring in new developments and pay for the infrastructure associated with new house building,' said head of communications, James Hulme.

'NLGN has previously advocated financial rewards for communities that allow energy generation plants and we feel that the carrot and not the stick approach is better way of gaining consensus.

'We are however concerned that the incentives set out today might not be sufficient to encourage councils to undertake new house building projects, especially those in the south of England where many of the most acute housing problems exist. A higher level of incentive for areas requiring the most urgent housing growth could be needed to make today's announcement a success.'