Government must build more than 3m homes

England faces a worsening housing crisis unless the government increases its target for new homes, an independent report has said.

The National Housing and Planning Advice Unit (NHPAU) said an extra 250,000 homes were needed above the target set for 2020 in its response to the government’s Housing Green Paper.

The advisory body made the case for 270,000 homes to be built a year by 2016 rather than current target of 240,000.

NHPAU chairman Stephen Nickell said the government had shown commitment to delivering new housing in the green paper but more needed to be done.

He said: “If we fail to act then a generation of buyers will be unable to get a foothold on the housing ladder, not just in London but across large swathes of England. And current home owners will not be able to move on to bigger and better homes.”

He added that Regional Assemblies, Development Agencies and planning authorities were best placed to understand local housing needs and “may decide to push supply well beyond the government’s national target.”

The Unit’s report, Developing a target range for the supply of new homes across England, warned housing affordability in the South West, South East and East could become worse than London by 2026 unless regional authorities increase their targets.

It said current housing plans could lead to average house prices increases of between 11 and 13 times people’s earnings.

London prices would be 11 times earnings, on average, compared to 11.3 times for the east of England, 12.4 times in the south east and 12.9 times in the south west, it said.

The report comes on the same day Housing Minister Yvette Cooper outlined plans to encourage local councils to push housing supply.

Ms Cooper announced that councils intending to build the most new homes will be given £1,100 per home and that this may increase to £5,000 by 2010/11. There will also be a £520m scheme to bring empty homes back into use.

Ms Cooper said some councils were not cooperating fully on the issue of building new homes. “Some of them say they don’t want more homes in their area, and the problem with that argument is that it’s just not fair – every other area needs to do its bit.”