The government said its move to remove “nutrient neutrality” rules will allow 100,000 new homes to be built before 2030.
The rules currently mean developers must prevent or offset pollution near rivers to gain planning permission, but they are set to be altered in the upcoming levelling up bill.
Developers have argued that most nutrient pollution to rivers is caused by fertiliser and slurry from farms rather than human sewage from housing.
John Anderson, chief executive of Allison Homes, said: “All parties agree there is a need to build significantly more homes each year to solve the housing crisis in this country. Applying EU law on nutrient neutrality meant that housebuilding had ground to a halt in some areas of the country and disproportionately impacted the delivery of new homes.
“The announcement by the government goes some way to unlocking this stalemate, helping people in these areas get the homes they desperately need, while putting in sensible measures to protect our environment and water systems.”
Larger housebuilders such as Barratt Developments has seen 2,500 homes stalled due to nutrient neutrality rules.
David Thomas, its chief executive said: “Alongside plans to mitigate the relatively limited impact of new build housing, we welcome the further commitment to tackling nutrient pollution at source in agriculture and industry and the much-needed planned improvements in our water infrastructure.”
This is likely to be a controversial move, as just 14% of England’s rivers were in good ecological health in 2019, while this ratio is expected to fall to 6% by 2027 according to the Environment Agency.