According to the latest Home Builders Federation Housing Pipeline report housing planning approvals now stand at half the level of four years ago.

This sustained drop over three quarters coincides with the Coalition Government having set out its Localism policy to change the planning system.

HBF Executive Chairman Stewart Baseley said: “These figures are extremely concerning.”

“The figures demonstrate the necessity for the Government to clarify exactly how the new Localism based planning system will deliver the homes, and supply the growth we desperately need.

“Only by ending the ongoing hiatus caused by the scrapping of the old system without a ready replacement can developers and councils plan ahead confidently and effectively for new housing.”

Across Great Britain, just 33,000 homes were approved for construction in the last three months of 2010 – 9% down on the previous quarter and 22% down on a year ago.

Social housing was hardest hit with only 5,500 approvals – a new low for the survey and particularly concerning with 5m people already languishing on council housing waiting lists.

HBF’s research follows the Government’s figures which revealed completions in England in 2010 slumped 13% to the lowest peacetime level since 1923.

Permissions granted for homes typically take up to three years to build. So the full implications of this drop will not be felt for some time.

However, with household formation projections showing the need for England to build around 232,000 homes a year until 2033, and 2010’s total at just 103,000 – there is obvious potential for the crisis to deepen.

Baseley added: “It is also crucial that councils recognise the housing shortage and accept their new responsibility for housing supply.”