Developers who fail to build new houses will could face tough new penalties under plans to tackle the country’s housing crisis. Those who sit on “vital land” and do not build promised homes could see their sites acquired by councils.

Housebuilders guilty of failing to make use of planning permission or who trade land “speculatively” could face a new “delayed home penalty” – and be denied planning permission in the future.

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The measures are intended to ensure developers do not “leave sites half-finished for years”. They will have to commit to get homes build in definite timeframes before they get planning permission.

Housebuilders will have to submit annual reports to council showing their progress. The threatened penalty would be “worth thousands per unbuilt home, paid directly to local planning authorities”.

Deputy Prime Minister Angela Rayner has told housebuilders to “roll up their sleeves” and get building as she works to deliver 1.5million new homes.

According to the Government, large housing sites of more than 2,000 homes can at least 14 years to build. The slow pace of housebuilding is blamed for young people being unable to get on the housing ladder or being unable to find an affordable home to rent.

Ms Rayner’s department claims the pace of building is “twice as fast” when more than 40% of homes in a development are “affordable”. New large sites may be required to be “mixed tenure by default”.

The Deputy PM and Housing Secretary said: “This Government has taken radical steps to overhaul the planning system to get Britain building again after years of inaction. In the name of delivering security for working people, we are backing the builders not the blockers.

“Now it’s time for developers to roll up their sleeves and play their part. “We’re going even further to get the homes we need.

“No more sites with planning permission gathering dust for decades while a generation struggle to get on the housing ladder. Through our plan for change, we will deliver 1.5 million homes, fix the housing crisis and make the dream of home ownership a reality for working people.”

It is hoped mandatory housing targets for councils will drive UK housebuilding to its highest level in more than 40 years and add £6.8billion to the UK economy by 2029-30.

The proposed measures will be laid out in a new working paper, Speeding Up Build Out.

Adam Hug, the Local Government Association’s housing spokesperson, said: “We are pleased the Government has acted on the LGA’s call for it to be easier for councils to penalise developers and acquire stalled housing sites or sites which have not been built out to timescales contractually agreed, ideally with the recovery being made at pre-planning gain prices.”

Kevin Hollinrake, the Shadow Secretary of State for Levelling Up, Housing and Communities, said: “We need more houses for people in Britain and we support measures to ensure developers speed up housebuilding. But, they are adding so many burdens on builders, their targets already seem like a distant memory.”