Prime Minister Gordon Brown has signalled a U-turn in proposals for the much-maligned planning gain supplement in a significant victory for UK property.

In a parliamentary address today laying out his proposals and list of draft bills he said there would be a rethink over the supplement – which taxes the uplift in value after planning consent has been granted.

Brown said: ‘The planning gain supplement is provisional because if prior tot the Pre-Budget Report a better way of ensuring local communities receive significantly more of the benefit from planning gain to invest in necessary infrastructure including transport – and it is demonstrated that these are a better alternative – the Government will be prepared to defer next session’s legislation’.

Faraz Baber, director for planning and regeneration at the British Property Federation, said it was ‘delighted’ that the prime minister had ‘opened the door for real engagement on the alternatives to a deeply flawed policy proposal’. He said: ‘The lacklustre support given to the proposals both by industry and the public sector are indicative of the proposals holding no weight in its future success and its is right that Government now look more seriously at ways in which to capture planning gain in a more meaningful way.

‘This will ensure local communities and the regions they are within prosper from economic development. The BPF will continue to work with Government in finding a more workable solution.’

In Brown's address, which is a break from tradition setting out plans which are normally only unveiled in the Queen’s Speech, he said the government would also work on increasing the supply of affordable housing and climate change and environmental proposals.