More than half a million people could be added to housing waiting lists if the Government slashes the budget for affordable housing, it was warned today.
The National Housing Federation said a 40% cut to the affordable housing budget would lead to 230,000 fewer homes being built between now and 2020.
It claimed this would leave an additional 570,000 people on housing waiting lists, while 283,000 jobs in the construction industry would either be axed or not created.
It added that the the wider economy would also suffer, with the cuts reducing economic activity by £50 billion during the coming 10 years.
The Federation, which represents English housing associations, warned the Government would also be "shutting the door" on an entire generation of families on lower incomes.
It said research had consistently found links between bad housing conditions and poor health, low educational attainment and higher crime rates.
Waiting lists for social housing are already at record levels, with 4.5 million people currently waiting for a home in England, while an estimated one million children currently live in overcrowded conditions.
But the rise in demand for new homes has coincided with a slump in the number being built, with only 123,000 properties completed during the year to the end of March, the lowest level since the Second World War.
The warning comes after the Treasury asked government departments to plan for cuts of up to 40% to their budgets, ahead of October's spending review.
David Orr, chief executive of the National Housing Federation, said: "It is clear the amount of public money available to fund various activities in the future is going to be tight.
"However, given the scale of the nation's housing crisis, it is critical that the nation keeps building affordable housing.
"Brutal cuts of 40% to the housing budget would effectively shut the door on an entire generation which would be left with little hope of ever being allocated a social home.
"We would urge the Government to closely consider the huge human, social and economic cost of failing to invest in affordable housing."Reuse content