Michael Gove is planning to slash red tape to pave the way for more home extensions and conversions of shops into houses in efforts to address the housing crisis.

As part of plans due to be unveiled on Monday, the Housing Secretary said new rules will be drawn up to give greater freedoms to carry out property extensions and to open up lofts.

Officials said the proposals will allow families to expand their home as their family grows but while still ensuring neighbours’ interests are protected.

New flexibilities will be introduced to allow shops, takeaways and betting shops to be turned into living spaces, with Mr Gove arguing that Britain must “make better use of the buildings we already have”.

Empty shops or offices cannot be gathering dust while we have an urgent need for more homes

The Department for Levelling Up, Housing and Communities said the proposals to relax rules around the use of retail space is designed to help rejuvenate high streets and provide greater density of housing in inner cities, rather than encouraging urban sprawl.

Lisa Nandy, Labour’s shadow housing secretary, said the announcement was a “drop in the ocean” that failed to address the scale of the housing shortage.

Mr Gove, in a speech in London on reforming national permitted development rights, is also expected to announce that the Conservative UK Government will cut red tape to enable barn conversions and the repurposing of agricultural buildings.

Ahead of his speech, Mr Gove said: “Britain needs more homes to fulfil more dreams of home ownership and increase choice for renters.

“But they must be of the right type and targeted in the right places.

“So we must build more in the places that make sense — in our inner cities so that we protect our countryside.

“And we must make better use of the buildings we already have — empty shops or offices cannot be gathering dust while we have an urgent need for more homes.

“That is why we are reviewing the rules around permitted development rights to make sure we can regenerate, build and grow.”

In an interview with The Sunday Telegraph, Mr Gove said his proposals would also include creating development corporations to unleash a wave of new homes in cities such as Birmingham, Manchester and Liverpool.

Councils will be given the opportunities to bid to set up the Government-sponsored bodies which will have the power to use compulsory purchase orders to buy up land and sell parts of it on to developers to build new homes.

Inspired by the regeneration created in east London by the Docklands Development Corporation in the 1980s, Mr Gove said his plans are to kick-start a “21st century renaissance for our great cities”.

The announcement comes only two weeks after a cross-party panel of MPs warned that Tory ministers are unlikely to deliver 300,000 new homes per year after making the target advisory rather than mandatory.

Prime Minister Rishi Sunak decided in December to downgrade the target’s status as he looked to see off a potential Conservative backbench rebellion.

The Levelling Up, Housing and Communities Committee, in a report published earlier this month, said its inquiry into the policy change had seen it told that the six-figure target would be “impossible to achieve” by the mid-2020s.

Clive Betts, the Labour committee chairman, said Mr Sunak’s decision was “already having a damaging impact on efforts to increase the building of new homes”.

Labour’s Ms Nandy has already announced plans to make it easier to build on unsightly parts of the greenbelt if party leader Sir Keir Starmer is elected prime minister at the next election, expected to be held in 2024.

Sir Keir has also pledged to restore the 300,000 housing target.

Responding to Mr Gove’s announcement, Ms Nandy said: “Britain desperately needs more homes, but another review is a drop in the ocean compared to what is needed to fix the housing crisis.

“We don’t need more reviews or press releases, we need bold action to get Britain building.

“That’s why Labour has set out plans to reform the planning system to build the homes we need.

“We will restore housing targets, reform compulsory purchase rules and take the tough choices to back the builders, not the blockers.”