David Prosser: The real housing crisis is still ahead of us

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Outlook Britain is facing a housing market crisis – but not the one you've been reading about over the past year as property prices have headed south. Believe it or not, look past the sea of unsold homes cluttering up estate agents' windows and you'll discover that this country faces an acute housing shortage.

This is particularly at the affordable end of the market where most first-time buyers are no closer to being able to afford to buy their own homes, despite the 15 per cent drop in the price of the average property.

Moreover, this shortage is about to get significantly worse.

The Government's target, based on its assessment of the UK's housing needs, is for the construction of 240,000 new homes every year until 2016. That's the total needed from public and private-sector builders if there is to be sufficient accommodation to meet demand in the rental and purchase markets.

Even before this year, the targets were not being met, but the figures unveiled yesterday by the Department of Communities and Local Government show just how rapidly the shortfall is growing.

Construction began on just over 22,000 new properties during the three months to the end of September – around a third fewer than in the second quarter of the year, and about half the number recorded for the same period of 2007. The Government first began recording this data in 1980 and has never published a lower figure.

We know why housebuilders aren't starting new projects – many of the biggest companies are in crisis, finding it almost impossible to sell completed stock at a profit and are focused now on reducing their debt burdens. But that doesn't mean the problem is going away. At this rate, the total number of homes built this year will come to barely 100,000, a million miles away from the Government's target.

Nor would one expect there to be any pick-up in 2009, certainly in the first half of the year, when all the projections are for house prices to keep falling. Next year's total will also fall woefully short of the target: you can bet your house on it.

Car manufacturers are pressing increasingly noisily for more public support as they try to cope with the impact the recession is having on their business. Housebuilders have a better public interest case for such help – over and above the small stamp-duty concession available now but currently only on offer for a limited period. At the very least, this stamp-duty extension must now be extended for an indefinite period.

Without a pretty remarkable turnaround, the house price crash headlines will be replaced much sooner than you might imagine by the debate about Britain's lack of affordable housing. Or to put it another way, bricks and mortar may not be quite the basket-case investment it currently seems.