The government’s own advisers have warned that even if it meets its increasingly ambitious target of building 2 million homes by 2016, housing affordability will continue to worsen.
Advice from the National Housing Planning Advisory Unit (NHPAU), issued to ministers this week, says a total of 2.3 million homes would be needed before 2016 in order to keep affordability at current levels.
This is despite a prediction last week by the Construction Products Association that housing output this year could fall to its lowest level since the Second World War.
The NHPAU recommends that between 231,500 and 276,900 homes should be built each year between now and 2016. This is equivalent to building between 2 million and 2.3 million homes.
Last year, 167,000 homes were built.
276,900 is our estimate of what it would take to stabilise affordability
Kevin williamson, NHPAU
Kevin Williamson, chief executive of NHPAU, said: “About 276,900 is our estimate of what it would take to stabilise affordability where it is. The range we have given is cautious, based on the best available evidence.”
Williamson said that the recent falls in house prices after the credit crunch would not affect the long-term upward trend in prices unless more homes were built.
Last week, figures from the National House Building Council showed that housing starts in May were 56% lower than last year.
John Callcutt, a former Crest Nicholson chief executive, said: “The government’s targets were high at the time they were set, and the events since 2007 have to have called in to question their feasibility.”