And the High Court agreed that the move was unlawful.
Mr Justice Sales, sitting in London, ruled that the house builders' argument was "well founded".
Cala Homes' lawyer, Ian Ginbey from Macfarlanes, said scrapping the targets without anything to replace them had "left a policy vacuum, caused confusion throughout the industry and directly resulted in proposals for tens of thousands of new homes being abandoned".
"What today's judgement identifies is that Pickles wasn't entitled to make the decision in the way that he did,” he added.
But Ginbey admitted that the High Court ruling might only succeed in delaying the scrapping of the targets until next autumn, when planned new legislation is likely to come into effect.
In the meantime, many housing developments rejected on appeal since the targets were scrapped in July could now be approved.
The court's decsion was welcomed by the Home Builders' Federation which said it would help local authorities plan new housing developments using the old targets while a new "locally-based" planning system is put in place over the next two years.
Junior communities minister Bob Neill said the ruling "changes very little".
"Later this month we will be introducing the Localism Bill to Parliament, which will sweep away the controversial regional strategies,” he said.
"Top-down targets don't build homes - they've led to the lowest peacetime house-building rates since 1924.
"The government remains firmly resolved to scrap this layer of confusing red tape.
"Instead, we will work with local communities to build more homes. This was a commitment made in the Coalition Agreement and in the general election manifestos of both coalition parties. We intend to deliver on it."