Homes shortfall hits South-East

Government housing plans leave a massive shortfall which will prevent many key workers getting on the property ladder or finding homes to rent, a report warns today.

A study by Cambridge University for the homelessness charity Shelter estimates a shortfall of 55,000 affordable homes a year, with London and the South-East worst hit.

The study says that housebuilding is at its lowest level since 1924. The number of affordable homes being built each year is half the level of the mid-Nineties and a fraction of that in the Seventies.

When Labour came to power in 1997 the number of affordable homes completed in England was 25,081. In 2002/03 it was only 13,601.

Shelter warned that the public money for housing would have to more than double from the £1.6billion allocated for this year and the next two years if the 89,000 affordable homes needed annually are to be built.

The Shelter report, Building For the Future, has already been used by Treasury adviser Kate Barker in her review of housing supply, due to be published on Budget Day.

It shows for the first time the full extent of the house-building programme required, including the needs of people living in substandard or overcrowded conditions and in temporary accommodation.

Shelter director Adam Sampson said the crisis was of "immense" proportions.

"If the Government is truly interested in solving the housing crisis rather than just keeping a lid on it, it needs to find the political will and, the money to deal with it. Last week the Halifax revealed that the number of first-time buyers in London had plummeted from 69,000 in 2002 to only 49,000 in 2003.

It found that the average age of a first-time buyer in London has shot up from 32 in 2002 to 35 in 2003. Only 8 per cent of London first-timers are 25 or under, compared with 16 per cent nationally.

The Halifax found that 80 per cent of the UK's towns were unaffordable for most first-time buyers, and in the South-East this was 86 per cent because prices rose by 17 per cent in 2003.