Angela Balakrishnan
The Guardian

About 5m new homes will be needed in Britain over the next 20 years to keep up with soaring demand. An updated government forecast released yesterday showed that the annual rate of household growth in England to 2026 is now 223,000 compared with the 209,000 calculated in 2003.

The new figure, based on population growth estimates by the Office for National Statistics, prompted fears among housing organisations that house price inflation will be driven higher by a bigger than forecast housing shortage and strong demand from migrant workers and City employees with hefty bonuses. House prices have already seen annual increases of 11% over the past 10 years, according to the Halifax, Britain's biggest mortgage lender.

Latest government data showed new house building rose only 0.5% last year to 160,000, well short of demand. If this trend continues, the shortfall of houses will hit 1m by 2026. Shelter, the charity for the homeless, said the new figures meant the "housing crisis" would deepen. Many buyers, especially first-time buyers, are already struggling to get on to the property ladder as soaring prices and higher interest rates squeeze affordability.

Graeme Brown, director of communications at Shelter, said: "With one in seven children in Britain growing up homeless or badly housed, and almost 90,000 homeless households trapped in temporary accommodation, there is an urgent need to build more homes."
Stewart Baseley, chairman of the Home Builders Federation, said local authorities needed to cut red tape to release more land for building.