Cameron to unveil planning reforms to boost economy

Britian's Prime Minister David Cameron arrives at 10 Downing Street in London September 5, 2012.

LONDON (Reuters) - The government is set to unveil planning reforms and new legislation on Thursday to kick start the construction sector, ease a chronic housing shortage and help stimulate the flagging economy, Prime Minister David Cameron's office said.

Cameron and Deputy Prime Minister Nick Clegg are expected to outline plans to relax planning laws, doubling the space currently allowed for property expansion, and launch legislation allowing the government to underwrite infrastructure projects.

The government is under pressure to turn around the recession-hit economy as its flagship austerity plan fails to bear fruit, and boosting construction would also help to alleviate acute housing shortages in some parts of Britain.

The scarcity of homes has helped push prices up beyond the reach of many first-time buyers, whom the government will pledge to assist with new schemes also to be announced on Thursday.

"We're determined to cut through the bureaucracy that holds us back," Cameron and Clegg said in excerpts from a joint statement they are expected to make later on Thursday.

"That starts with getting the planners off our backs. Getting behind the businesses that have the ambition to expand. And meeting the aspirations of families that want to buy or improve a home," they added.

However, the Royal Institution of Chartered Surveyors (RICS) called for a more ambitious plan and urged the government to guarantee loans to help developers raise cash more cheaply.

"What the market needs now is investment, not piecemeal planning reform," said Peter King, RICS Global Residential Director. "More ambition from the government would help create the homes and jobs we need to pull the UK out of recession."

(Reporting By Alessandra Prentice and Mohammed Abbas; Editing by Michael Roddy)