Communities secretary Eric Pickles has scrapped two key elements of the previous Government's planning policy by ditching regional spatial strategies and a target to build 3m new homes by 2020.
Gordon Brown set the housing target in 2007, but the minister described it as “failed, Soviet-style top-down planning”.
Pickles said: “The reality is that construction has slowed down so much the country is facing the lowest peacetime house-building rates since 1924".
He also abolished regional spatial strategies, meaning that councils will no longer have to aim for regional targets when planning their own housing numbers.
Instead, the Coalition Government will hand back powers to local authorities to decide where new homes are built through new local plans.
New guidance issued to councils says that any wishing to review their housing targets "should quickly signal their intention to undertake an early review so that communities and landowners know where they stand".
Pickles said he was "hammering another nail in the coffin of unwanted and an unaccountable regional bureaucracy".