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750,000 homes shortfall by 2025

The gap between housing supply and demand in England could reach 750,000 by 2025, according to government projections

Firms will need to increase the annual number of new additions no matter how the economy performs to avoid a shortfall in housing, with the social housing sector under the greatest pressure, figures show.

Housing supply is currently around 160,000 each year but this will not be enough to meet demand, even in tough economic times, figures from the Institute for Public Policy Research show. The demand for homes will be around 200,000 a year when economic conditions are poor, according to the analysis.

The housing supply gap will be most pronounced in London, the South East, Yorkshire and Humberside and the East of England.

If the economy performs well, there will be a demand for 280,000 new homes a year, the ippr analysis found.

The ippr predicted that at least 550,000 extra households will be in need of social housing by 2025, a figure which could hit 1.2 million if economic conditions are tough.

Nick Pearce, ippr Director said: “We can’t go on as we have done. Britain needs to build more homes. That’s not going to happen without a fundamental review of housing policy. This new analysis shows the serious scale of the problem.

“If the rate of house building doesn’t radically increase, we face a growing housing crisis. Whether the economy performs well or poorly, a serious gap looms between housing supply and demand.

“Our ageing population and rising expectations for living standards are going to drive up demand but if there’s no change in housing policy it will seriously hold back supply.”

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