The government looks set to spring a major surprise by unveiling plans to shake-up the housebuilding rules as part of Liz Truss’s efforts to boost economic growth.

One of the most eye-catching proposals would include offering some developers an exemption from building affordable homes, as well as plans to scrap some environmental protections and allowing people to add extensions without permission.

As part of the efforts to lift regulatory burdens on housing developers, it has also been claimed the Tories’ manifesto pledge to build 300,000 homes a year is ‘dead in the water’.

According to The Times, levelling up secretary, Simon Clarke, has written to the prime minister with proposals to boost housebuilding.

Reforms are said to include raising the threshold at which affordable homes must be built – from developments with 10 houses to those with 40 or even 50 houses – in a bid to boost small and medium-sized developers.

Clarke is also reported to be considering ending a ban on building 100,000 homes in parts of Norfolk, Hampshire, Devon and the North East designed to protect wetland.

Another proposal is to expand ‘permitted development rights’ so people can build extensions or add extra floors to their properties without planning consent.

A government source told The Telegraph that the Tories’ pledge to build 300,000 homes a year by the middle of the decade was now “dead in the water” and councils will not be held to task over whether they meet it.

The newspaper reported that by scrapping the rules on how many affordable homes are provided in new developments, it will end delays caused by arguments between councils and developers.

The source reportedly said: “There is a feeling that it is unrealistic to scare councils into building these houses, and there are plenty of ways to incentivise them to build houses other than setting a target.

“You could look at the regulatory environment and ways to free up more land.

“The government is still going for growth, with or without this target.

“It should be possible to get rid of certain EU environmental regulations, which could free up other pieces of land.”