Thinktank blasts Prescott's housing vision

Plans to build thousands of new homes in the South East are attacked by the Government's favourite thinktank today.

The Institute for Public Policy Research suggests ministers have grossly overestimated the number of new houses needed.

It warns that the sweeping plans - which have outraged conservationists - are not the most effective way to provide affordable housing.

The analysis is the most trenchant criticism yet of Deputy Prime Minister John Prescott's plan to build up to 141,000 new homes a year in the South-East following recommendations by the Bank of England's Kate Barker.

He hopes the new builds will help thousands more people get onto the property ladder. The vast majority of the new homes - 120,000 a year - would be private-sector.

But the thinktank's report, revealed in today's Financial Times, describes the approach as a "blunt and probably ineffective" response to the "complex" housing market.

It argues a reduction in house prices could be achieved by building just 59,000 new homes, and calls for resources to be ploughed into more social housing.

The criticisms will be seized on by environmentalists, who fear Mr Prescott's plans will have a devastating impact on the countryside.