Rigid environmental laws have led to effective bans on house building in many areas across the country, Parliament has been told.

Meanwhile, the Government is not on track to meet either its housing or environmental targets, according to peers from the Built Environment Committee.

A cross-party group of peers has warned that strict regulations on water, nutrient neutrality and biodiversity result in a “perverse” slew of unintended consequences.

They argued that the nutrient neutrality requirements hinder plans to build homes, while the main polluters are actually intensive farming practices and water companies dumping sewage.

Social housing leader Lord Best told the House of Lords: “Environmental regulation is, of course, absolutely essential – but heavy-handed imposition of rigid edicts can have devastating consequences.

“The water and nutrient neutrality requirements have led to a ban on new home building in many areas at just the time we most need a significant increase in housing production.

“When environmental regulation trumps the planning system, even contradicting the content of local plans, the consequences can be felt by innocent parties, not least by those who need a home.”

The independent crossbench peer added that these rules were imposed “like a bolt from the blue” and “stopped housing development in many areas, even though this only adds a tiny fraction to the pollution of our rivers”.

He argued that it fails to address the “vastly more significant pollution from intensive farming practices” and “the failure of the ineffectually regulated water companies to fulfil their obligations”.

His comments came as the House of Lords debated the Built Environment Committee’s report entitled The Impact of Environmental Regulations on Development.

Chair of the committee Lord Moylan explained that an EU ruling on nutrient neutrality is now being imposed by Natural England, which issues advice to councils, many of which are “delighted to be told they can’t build anything in their area”.

He also noted that a requirement for biodiversity net gain puts pressure on small and medium-sized house builders, for whom incorporating this is “extraordinarily difficult”.

Meanwhile, larger house builders are able to mitigate the impact “off site”, meaning they buy up agricultural land and “turn it fallow”.

He argued that this contradicts the UK’s food security policy and the Department for Environment, Food and Rural Affairs (Defra) target not to let the percentage of food produced at home to fall below 60%.

Another problem with the biodiversity requirements, he argued, is that it can actually discourage building on brownfield sites, which most agree is desirable.

He said: “A brownfield site, if left derelict, actually becomes biodiverse quite quickly – the weeds come, the birds and the bees, the rodents arrive and so on.

“So if you’re going to take a brownfield site that’s been left derelict for some time and build on it, the first thing you do is you contribute a negative biodiversity net gain because you’re going to flatten it and destroy all that …

“We are perversely encouraging greenfield site development, when we say we want to encourage brownfield sites.”

In all he said, neither the Government’s house-building nor environmental targets are likely to be met and are actually “working in antagonism with each other.”

The approach of Natural England in effectively blocking housing developments was branded a “sledgehammer” by Tory peer Lord Jackson of Peterborough, who argued that existing nutrient neutrality laws be scrapped and for ministers to have the power to bypass local planning authorities to grant planning permission.

Levelling up minister Baroness Swinburne reiterated the Government’s “commitment to delivering the homes we need, while ensuring we continue to protect and enhance the environment”.

She said: “A key focus for the Government is to increase housing supply and I’d like to reassure you that we are on target to meet our manifesto commitment to deliver one million homes in this Parliament.”

She admitted that nutrient neutrality has “created a situation where some local authorities are not able to approve development”.

However, she said: “To remedy this, we continued to provide funding for local authorities to support strategic management and mitigation plans in their areas. The funding is already delivering an impact, enabling sustainable development.”

She added: “We agree that taking agricultural land out of production is not the optimal way of addressing nutrient pollution …

“Our nutrient reduction plan includes funding for agriculture, encouraging further nutrient management actions for farmers and with plans to modernise fertiliser standards.”

On the issue of biodiversity, she said: “Smaller developers need support, so we have provided a simplified small sites metric to streamline the process for calculating net gains for small sites.”

Finally, on incentives to build in the right place, she highlighted the Brownfield Housing Fund, which aims to “unlock and prepare more sites” for development.

Lord Moylan responded that the Government was not acknowledging that the system is broken, and is instead spending money “to work around the nutrient neutrality bans on housing” while ignoring the “overwhelming predominant cause of the pollution in our rivers”.

He concluded: “It seems to be that the Government hasn’t quite grasped the seriousness and systemic nature of the problems.”