You are in > manchester.com  > News > Housing target 'must be upped'

Finance

Housing target 'must be upped'

26/10/2007

A generation of potential homeowners will be unable to get on the housing ladder unless official homebuilding targets are increased, a report has warned.

The independent body established by the government to look at the problem of a lack of affordable housing stresses that more than a quarter of a million extra homes will be needed, beyond those already planned, by 2020.

According to the National Housing and Planning Advice Unit (NHPAU) the government should aim to build an additional 270,000 homes each year by 2016 in order to address Britain's housing affordability crisis – more than the 240,000 ministers have said they hope to build annually.

The organisation's report warns that unless more homes are built, house prices will continue to soar and exacerbate affordability pressures on property buyers.

It stresses that based on current housing plans house prices could reach more than ten times average earnings by 2026, with housing affordability even set to become more of a problem in the south-west, south-east and east of England than in London if targets are not raised.

Estimates based on current regional housebuilding strategies warn that average house prices could rise to 11.3 times average earnings in the east of England, 12.4 times average earnings in the south-east, 12.9 times the typical wage in the south-west and 11 times the average salary in London.

Commenting on the report NHPAU chairman Stephen Nickell said: "England is an aspirational, prosperous and growing nation and that means a demand for more housing.

"If we fail to act then a generation of buyers will be unable to get a foothold on the housing ladder, not just in London but across large swathes of England."

But responding to the study, the government stressed that the report recognised the government's new housing target was a "major step" towards addressing the problem of affordability in the property market.

Housing minister Yvette Cooper also suggested that it was up to the country's regional assemblies to raise their own house building targets in order to increase the availability of affordable homes.

"The report underlines yet again why it is so important to build more homes for future generations, and it should provide a further wake-up call to regional assemblies to raise their ambitions to support the homes young families and first time buyers need," she stressed.