Sweeping planning reforms have been announced, which the government claims will speed up UK housebuilding and make it easier for homeowners to extend their existing properties.

The reforms were released by the Treasury as part of the government's 'Fixing the Foundations: Creating a More Prosperous Nation' document, which aims to boost UK productivity. It was unveiled in Birmingham by Chancellor George Osborne and Business Secretary, Sajid Javid.

As well as streamlining the time it takes for local councils to consider planning applications, and the processes involved, government will also consider how national policy and guidance can ensure that unneeded commercial land can be released for housing.

One key reform announced today is that government will legislate to grant automatic planning permission in principle for building work on those brownfield sites identified on statutory registers of brownfield land suitable for housing in England. This will create a 'zonal' system, which the government believes will reduce delays and uncertainty surrounding new developments.

There will be additional compulsory purchase reforms applied to brownfield land, with detailed proposals on how this can be introduced expected in the autumn.

The government has also addressed planning issues specifically related to London. The devolution of wharves and sightlines will go ahead, as well as bringing forward proposals to allow the Mayor to call in planning applications of 50 homes or more. The Mayor will also be allowed to produce Development Corporations and promote Compulsory Purchase Orders.

Building owners in London who wish to extend their properties upwards, to the same height as an adjoining building, will no longer need to obtain planning permission.

As has previously been outlined, tenants of housing associations will also be give the right to buy their homes through the Housing Bill.

The Institution of Mechanical Engineers welcomed these initiatives as showing the government is taking action, but warned that it needs to be far more radical in its thinking.

Dr Colin Brown, director of engineering, said: "Reforming the planning system is one approach, but we fundamentally need to look at overhauling the way we construct homes in the UK. Off-site construction technologies have advanced greatly in recent years and can offer shorter build times, better quality, better energy efficiency, less waste and lower costs for buyers.

"We need a minimum of 250,000 houses to be built each year to keep up with the nation's growing population. At no point over the last two decades has the figure exceeded 180,000, therefore, it is imperative this number is increased so we can meet demand."

The Federation of Master Builders (FMB) described the changes as a major step towards solving the housing crisis.

Brian Berry, FMB chief executive, said: "Housing has for too long been put in a separate box from economic development, infrastructure needs and productivity. Today's announcement marks a significant step towards correcting that imbalance. It also shows an admirable determination to free up smaller locally-based house builders to do what they do best and deliver high quality housing on small sites in sustainable locations.

"Smaller brownfield sites are often the bread and butter of these firms, but the time and cost involved in obtaining planning permission even for the smallest of sites can be hugely prohibitive. Measures announced today [...] will help achieve precisely this and the government deserves great credit for these bold steps."