The Home Builders Federation has warned that there could be a hiatus in housebuilding after South Oxfordshire council moved to scrap housing targets in line with government advice.

The HBF has demanded clear guidance on how housebuilding levels will be maintained when housing decisions are handed over to local authorities, amid fears that the policy could lead to councils quietly dropping support for new homes.

South Oxfordshire council has cancelled meetings about its “core strategy” for housing after a letter to local authority planning chiefs from Eric Pickles, the communities secretary, said the government planned a quick transfer of housing and planning powers to councils.

The HBF said the decision to give local authorities power over housing decisions had left the industry with a “vacuum in guidance”.

The changes to housebuilding policy are set out in the Localism and Decentralisation Bill, which is due to be put before parliament in the autumn. Housebuilding organisations estimate it will take until 2012 for the policy to come into law and councils can make new housing plans.

Andrew Whittaker, planning officer at the HBF, said that housebuilding in the south of the country could be particularly hard hit.