England faces the prospect of 750,000 dwelling unit shortages by 2025 if the pace of house building does not pick up, with London and the South East being hit the hardest.
According to the report published by the think-tank Institute for Public Policy Research (IPPR), only the North East will be building enough homes while London, Humberside, Yorkshire, the South East and East of England leading in deficit.
If the economy expands slowly, total number of new homes to be built will be around 200,000. However, if the economic expansion is faster, the need for new homes may jump to 280,000 per annum.
London will lead in home deficits with a shortfall of 325,000 homes followed by Humberside and Yorkshire with 151,000 homes.
“If the rate of house building does not radically increase, we face a growing housing crisis. Whether the economy performs well or poorly, a serious gap looms between housing supply and demand”, said Nick Pearce, director of IPPR.
“Our ageing population and rising expectations for living standards are going to drive up demand, but if there is no change in housing policy it will seriously hold back supply”, he added.
In an attempt to boost home supplies the government will introduce New Homes Bonus scheme in April, which rewards local authorities for each new home built. The government is set to introduce a slew of measures, including introducing changes in the planning system.