Neil Fitzsimmons, Redrow managing director said that the policy failed to take account of the fact that much of the existing housing stock was unwanted.
He said: "The demand for new housing in the North is still very strong. We have to address the quality of stock – even areas that claim they have got enough housing don't have places that people actually want to live in."
Many councils have taken the view that they are entitled to choke off development because they have met their housing targets.
The warning comes a week before the Barker review reports on ways to increase housing supply.
When consulted for the review, Redrow said the government needed to ensure that local authorities did not reject planning permission for housing because of local pressure.
Fitzsimmons issued his warning after the announcement of Redrow's interim results.
Areas claim they have enough, but don’t have houses people want to live in
Redrow MD Neil Fitzsimmons
In the six months to 31 December pre-tax profit was £56.7m, an increase of 10% on the second half of 2002. Turnover rose 5% to £310.8m from £296.4m.
Redrow also signalled that it expects the remainder of the financial year to be strong by increasing its dividend payment 20% to 3p. It disclosed that its landbank is made up of 16,100 plots.
The housebuilder also announced it is opening an office in Exeter, called Redrow Homes (West Country). This is the company's 12th subsidiary and has two or three developments currently going through planning. House production should start in the next 12 months. The subsidiary is expected to grow into a 250- to 300-unit business.
Redrow as a whole produces more than 4000 homes a year but the board believes that it will have the capacity to build about 6000 in the near future. Its steel-frame housing joint venture with Corus is set to produce 350 units this financial year. Fitzsimmons said that he expects the Derbyshire-based business to build 2000 units a year by 2006.
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