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England needs 3.4 million new homes by 2020

Thursday, 26 June 2008 12:00 AM

England requires 3.475 million new properties by 2020, according to the National Housing and Planning Advice Unit (NHPAU).

Without this number of new homes, property will remain unaffordable, to the detriment of society, the government has been told.

Although these figures are at the upper end of the range of predicted necessity, they will make worrying reading for Gordon Brown's administration, which has promised just three million new homes.

Even this target seems increasingly unrealistic given the present slowdown in the property market, with well below the 240,000 homes annually required to meet the target being built.

However, the NHPAU urged builders not to focus on the short-term negativity in the market, and instead to concentrate on long-term construction goals - saying the market was beginning a period of "adjustment".

"We are at the beginning of a period of adjustment in the housing market," said

"And while inevitably there is now a focus on the gloomy short-term prospects and some uncertainty arising from this, for the sake of communities and future generations it is vital that planners and decision makers keep an eye on the medium and long term," said Stephen Nickell, chair of the NHPAU.

Demand in the south of the country is thought to be the most urgent, according to the NHPAU.

Some 486,200 homes are needed in the south-east by 2020 to meet demand, requiring a construction rate of 37,800 properties annually.

Similarly London requires 428,500 properties at 33,800 a year, while the south-west will need 379,600 by 2020, 29,000 annually in order to maintain sufficient supply.

However, even these estimates may ultimately prove conservative.

"Given the difficult immediate outlook for the economy and the housing market, we have also been cautious about the assumptions which underpin our analysis, for example about earnings growth, interest rate prospects and levels of future household formation," continued Mr Nickell.

The NHPAU stressed the figures were only advice to the government on the potential for demand, and as such should not be seen as regional housebuilding targets.

The Department for Communities and Local Government (CLG) team will consider the recommendations when it finalises its own formal guidance to regional planning authorities in its Regional Spatial Strategy (RSS) reviews, which are due to be completed by 2011.

The Town & County Planning Association (TCPA), however, argues the findings highlight a chronic shortage of supply in the UK market.

"Yet another set of research has highlighted the major undersupply of homes in this country despite the economic conditions that now make their delivery more difficult," said TCPA chief executive Gideon Amos.

"Central and local government should respond by releasing public land and subsidising Housing Associations (HA) and other providers to help maintain construction capacity through this downturn.

"Plans will need to help prioritise the most viable projects now.

"This period should also be used to prioritise master-planning major urban housing growth and other developments, such as eco-towns, so they are ready to roll when the industry picks up."

Chris O'Toole

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