A CONSERVATIVE Government would relax planning rules to make it easier for villagers to build their own homes to help solve the rural housing crisis, the shadow housing minister told the Tory conference yesterday.

Grant Shapps said the party would grant powers to allow villages to expand by 10 per cent over 10 years if it won the General Election next year. He said the Government's "top-down Soviet style targets" were not working, and re-iterated promises to dump "pointless" housing targets.

Under current arrangements, rural communities are restricted from building by a small development footprint and the planning system's heavy emphasis on developing brownfield sites. But the Tory plans would give villagers the power to hold parish-level referendums to decide whether they want to increase the size of the village – in effect letting communities grant themselves planning permission.

Mr Shapps said he wanted to create a "nation of homebuilders".

He told conference: "Forget waiting for bureaucrats on high to ride to the rescue, we'll back your street-level initiative, help you regenerate your area and empower you to reclaim your neighbourhood."

Community leaders have bemoaned the fact that local amenities such as schools and post offices are under threat because young families cannot afford to buy homes in the countryside.

Despite tumbling house prices, the cost of a property remains as much as 12 times the local average wage in some parts of the region. It has rendered many villages as "ghost towns", dominated by second homeowners who only live in the village for part of the year.

A Local Housing Trust, the community-run organisations that will build the homes, is similar to a model already adopted in pockets of the Westcountry. So-called self-builders in the village of St Minver, North Cornwall, who built a small development of properties close to "Millionaire's Row" in Rock.

Homes worth more than £250,000 on the open market were built for just £85,000 apiece and were guaranteed to be in local ownership in perpetuity. A Tory government would, for six years, also match pound-for-pound the extra council tax raised by self-built houses as an incentive to build more homes.

He told the conference: "Let's start by giving people something in return for development. When your community builds more homes, we'll match pound for pound the extra money that your area gets in council tax, for six years.

"The more ambitious you are the more money your neighbourhood will get." He went on: "You and I know this country needs more homes – homes for children and our grandchildren. But we also know that the top-down Soviet- style Labour approach to housing just isn't working."

The Conservatives also plan to abolish unelected assemblies and scrap regional spatial strategies.

National Housing Federation chief executive David Orr welcomed the call to build more houses, saying: "The Conservatives' commitment to building more affordable homes to meet local needs is very welcome.

"Whatever process or system we use to achieve this aspiration is, in many ways, irrelevant – because the bottom line will always come down to how many families we've housed and helped off the waiting list."