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England will have a backlog of a million homes by the end of 2010 according to a report released this week.

TCPA-published Mind the Gap 鈥� Housing Supply in a Cold Climate written by Paul Hackett, director of the Smith Institute and David Pretty, former Barratt chief executive, found that production was at its lowest level in 80 years and that the gap between supply and demand would be 150,000 for this year alone, equivalent to Nottingham.

The authors used figures from the communities department predicting that the number of households in England would increase from 21.1 million in 2004 to 26.6 million in 2026 and over 27 million by the end of the decade.

Meanwhile, they said housing completions may be as low as 100,000 in 2008/2009 with the rate of growth in the housing sector unlikely to rise above 10% per annum for the next few years, and possibly as low as 5%, based on modelling from the National Housing and Planning Advice Unit.

Discussing the report, Hackett said that the Conservative policy focusing on localism sent the message that the housing shortage was 鈥渘ot that serious. But you only have to do the maths to work out that this is more serious than people previously thought.鈥�

He continued: 鈥淲e risk moving from a financial crisis to a serious housing crisis. It鈥檚 not an area that you can trim without massive consequences.鈥� He urged government to maintain public investment in private and affordable housing at current levels.鈥�

In response, the pair came up with 14 recommendations that it thought might improve the situation, including releasing more land, supporting local councils to establish new local housing companies and rescheduling Section 106 agreements and future regulations to reduce the impact on new housing supply.

The report comes as the Homes and Communities Agency confirmed it would slash its overall expenditure 拢1.4bn next year from 拢7.5bn to 拢6.1bn. In its two-year corporate plan, it also revealed its budget for property