House building targets may not stop crisis

Government house building targets are not high enough to avoid a housing crisis, according to the National Housing and Planning Advice Unit.

Its report said that average house prices could rise to up to 11 times average earnings and that 270,000 new homes were needed every year to control price rises.

Current government targets aim for 240,000 new homes every year.

Professor Stephen Nickell, who co-wrote the report, said: “Our projections suggest that, if we stick to existing house building plans, house prices could get up to as much as 11 times income.

“If the government succeeds in getting their 240,000 plans a year going, then it would be somewhat less than that, but still as much as nine times average incomes.”

The National Housing and Planning Advice Unit report comes as housing minister Yvonne Cooper is expected to announce funding to encourage councils to help build millions of affordable new homes.

Ms Cooper is also expected to announce plans to include measures to encourage councils to bring many of the 670,000 empty properties across the UK back into use.

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