An updated government forecast released by the Office for National Statistics (ONS) shows that the 2003 figure for annual rate of household growth is an underestimate. The ONS now estimates that growth will be 223,000 households per annum whereas the 2003 figure suggested 209,000. The new figure means that just under 5 million new homes will be needed by 2026.

This has led to fears that house price inflation, which has stood at 11% per annum over the last decade, will be further fuelled by shortages in supply. UK house building in 2006 only provided 160,000 units – an increase of just 0.5% on 2005. If this trend continues the shortfall by 2026 will be 1 million homes.

The Chair of the House Builders Federation called for local authorities to cut red tape and release more land for building.