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

The Town and Country Planning Association report, Mind the Gap, was written by David Pretty, the former chief executive of Barratt, and Paul Hackett, director of the Smith Institute. It found that production was at its lowest level in 80 years and that the gap between supply and demand would be 150,000 this year alone 鈥� the equivalent of a town the size of Nottingham.

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

Meanwhile, they said housing completions may be as low as 100,000 in 2008/09, with the rate of growth in the housing sector unlikely to rise above 10% a year for the next few years.

The gap between supply and demand will be 150,000 in 2009 鈥� equal to a town the size of Nottingham

Hackett said: 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 the government to maintain investment in housing at current levels.

The authors came up with 14 recommendations to improve the situation, including releasing more land, helping councils to establish local housing companies and rescheduling section 106 agreements.

The report comes as the Homes and Communities Agency confirmed it would cut spending 拢1.4bn next year from 拢7.5bn to 拢6.1bn. In its two-year corporate plan, it said its budget for property and regeneration would be halved from 拢406m to 拢211m.