The shortage of homes will dramatically increase houseprices

A massive shortage of homes has been predicted, according to David Pretty, Chairman of the New Homes Marketing Board as the recession halts housebuilding.

The housing market is expected to remain at a downturn for some time, but will improve in time when more mortgage funding becomes available. This pent-up demand will then be released into a market unable to fulfill housing needs says Mr Pretty, potentially sending house prices soaring.

“Even before the current recession, nationally housing production was well below previous decades” he said. “Today, we are in a far more difficult situaion. The reality is that we are forming households at the rate of around 230,000 each and every year. But we haven’t built anywhere near those quantities for many years, so now we have a serious backlog which continues to build up”.