Scale of England's housing crisis laid bare by National Audit Office

NAO overview of housing market shows average shortage of 61,000 homes a year.

The National Audit Office (NAO) has in an overview of the housing market highlighted the scale of the homes crisis in England, to which there is no clear end in sight.

There were projected to be 227,000 new households formed a year between 2011 and 2021, said the NAO, yet there have been just 166,000 extra homes delivered on average each year over the past decade, a significant deficit.

A housing shortage is felt most acutely in London and the south-east of England, where demand is highest. House prices and rents are larger than elsewhere in the country, and have also risen much faster in recent years.

"The need for housing in England has in recent years grown faster than its supply, and housebuilding needs to increase across the country," said Amyas Morse, head of the National Audit Office (NAO).

"The government has responded to this by putting in place a range of policies to increase housing supply and home ownership. Central to this is an ambition to increase the supply of housing by one million homes by 2020, largely through support to private housebuilders. Delivery of this target will not require a substantial increase in current levels of housebuilding."

A mixture of the high price of land, a construction skills shortage, strict planning laws, and the decline in housebuilding by local councils has contributed to the housing crisis. Industry groups say the drop in the number of small and medium-sized construction firms building homes has also made the situation worse.