The Deputy Prime Minister, John Prescott, made the claim yesterday when he published new figures showing that England would need 300,000 fewer homes than expected over the next 17 years.
Mr Prescott announced that 4.1 million new households were projected to be created by 2016, down from the last government's estimate of 4.4 million.
The number of single people living on their own, the group that makes up the largest proportion of home growth, was lower than previously calculated, while the amount of cohabiting couples was higher.
Mr Prescott said that he was publishing the projections to counter recent speculation that he was set to revise upwards to 5 million the figure for new homes.
The Tories had worked out that England would need 4.4 million homes between 1991 and 2016, but the corrected figures now show that household growth will increase by 3.8 million between 1996 and 2021.
About 150,000 new homes a year will be needed, compared to the 175,000 a year previously anticipated, a drop that environmentalists said should ease pressure on the greenbelt.
The new statistics show that areas like the North-west, Yorkshire and the North-east are expected to need many fewer new homes, although the pressures on the South-east and South-west remain similar.
Mr Prescott said that although the figures were important, he wanted to move away from the "predict and provide" culture that had dominated the issue of housebuilding for the past 20 years.
The statistics were not predictions, but based on what might be expected if previous trends continued, he stressed.
"Such trends can and do change as a result, for example, of demographic or economic factors, as the new cohabiting assumptions show," he said.
Mr Prescott said the Government wanted to meet housing needs by setting a target of 60 per cent of homes to be built on urban, brownfield sites, and by allowing local planning authorities and regional development agencies more flexibility.
"Our emphasis is on urban renaissance, making our towns and cities places where people want to live," he said.
Tony Burton, of the Council for the Protection of Rural England, said that the volatility in the figures proved that the Government was right to move away from the "predict and provide" strategy of the Tories.
However, although the projections had fallen, they still showed 20 per cent more homes would be needed over the 25-year period, a fact that put huge pressure on the countryside.
"Rural England will receive scant relief from a fall in the household projections unless the Government acts with greater urgency to undo the damage of past policies."
The Housebuilders Federation countered that the figures proved that new housing was vital if the nation was to meet the demand. The federation's spokesman said the Government's push to build on brownfield sites ignored the reality that the demand was highest in areas like Swindon and Suffolk, where new jobs were being created.Reuse content