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The head of Barratt Developments, one of the nation's biggest housebuilders, has called on the government to cut the price of public land to offset the cost of making developments greener.

David Pretty, Barratt's chief executive, told the government it should offer a 25% discount on the value of former NHS and Ministry of Defence sites to compensate the industry for the cost of installing sustainability measures.

Pretty said this policy would give housebuilders an incentive to fit their homes with combined heat and power plants, wind turbines and underground heating, which are thought to raise the construction cost of a house by £7500.

He said: "The government is the UK's largest supplier of land. If they sold it to us at 25% less than market value there would be more environment-friendly homes at prices low enough for first-time buyers to look at."

Pretty said that at present housebuilders would struggle to prove to individual homebuyers that it was worth their while paying extra for more sustainable houses.

He said: "The measures allow energy savings of £360 to be made a year. But even at this rate it would take 21 years to pay back the costs."

If they sold land at 25% less than market value there would be more green homes

David Pretty, Barratt

Pretty was speaking to an audience of councillors and developers at the opening of Barratt's "EcoSmart" village in Chorley, Lancashire. The village, which is made up of seven show homes fitted with the latest environmental technology, is one of the first times a large housebuilder has embraced sustainability.

Although some of the homes will be inhabited, their main purpose is to work out how much the technology costs. A team of scientists from the University of Manchester will scrutinise the results and report back.

Pretty added: "The point of the village is to give the government evidence about the precise costs and benefits, and what buyers are prepared to pay for them. We could have done futuristic designs but we were keen to show how environment-friendly measures could be incorporated into homes."

The Barratt boss is no stranger to lobbying the government. Earlier this year he published an 18-point plan to improve the housebuilding process, including measures to improve the supply of affordable housing in rural areas.

In his report Pretty advised that local authorities across Britain should identify up to two acres of land in every rural town and village exclusively for building homes for first-time buyers.