Government to miss new homes target by 250,000 shortfall, charity warns

An eight per cent drop in house building is expected over the next year

The current rate of construction is at its lowest since the 1920s; indicators suggest the best way out of the housing crisis is to build - and keep building (Getty Images)

The Government will miss its target commitment to build one million homes by 2020 by more than a quarter unless radical reform takes place, housing charity Shelter warned.

A slowdown in the rate of house building, caused by the UK’s decision to leave the European Union, will mean 266,000 fewer homes will be built in England than pledged, a report commissioned by Shelter said.

The one million target, set in 2015 by then-housing minister Brandon Lewis, was designed to ease the UK's growing housing crisis.

House prices have risen to seven times the amount of people’s income, while more than 50,000 households are made homeless in the UK every year.

But independent forecasters Capital Economics, commissioned by Shelter, predicted the government would not meet its target under its current plans.

Instead, an eight per cent drop in house building was expected over the next year, due to post-referendum uncertainty taking effect on the largest house building companies, the report warned.

If this trend continues, England will be building houses at a slower rate in 2020 than before the 2008 financial crash.

Roger Harding, director of communications at Shelter, told The Independent: “Our housing shortage means millions of people are having to put their lives on hold – stuck in a cycle of sky high rents and instability. And at the sharp end of the crisis, homelessness is rising, with more and more families languishing in temporary accommodation.

Shelter called for the Government to urgently adopt measures to prevent a building slump, like that seen following the 2008 financial downturn. It has asked the government to support the buy-to-rent sector and for public bodies to commission small companies to build houses.

The charity also said it wanted local communities to have the power to force landowners to make room for homes if there was a local need.

Although the decision to leave the European Union was predicted to negatively impact businesses, Shelter suggested using the resulting low borrowing costs to invest in new housing.

“The new government has a real chance to give hope back to those being left behind by our shortage of homes, but only if they commit to measures that will reform our broken house building market for the long term," Mr Harding added.

Gavin Barwell, Theresa May's new Housing Minister, has had his commitment to building new houses questioned after it emerged he fought against the construction of hundreds of homes in his constituency.

In response to the prediction that the government will fall far short of the one million target, a Department for Communities and Local Government spokesperson said: "The reality is we are getting Britain building again, with almost 900,000 homes delivered since the end of 2009.

“But we know there is more to do. That’s why we’ve doubled the housing budget, including investing £8 billion in an extra 400,000 quality affordable homes to rent and buy,” they added.