Page last updated at 07:09 GMT, Friday, 19 September 2008 08:09 UK

New housing target 'impossible'

New-build house in Cressington, Liverpool
Work started on this new-build house before the credit crunch

The government has been warned its plan to build three million homes in England by 2020 is "almost impossible" to meet.

David Orr, the chief executive of the National Housing Federation, is calling for urgent radical action.

The credit crunch has adversely affected the UK's property market, with fewer homes being built.

A Communities and Local Government Department spokesman said ministers remained committed to the target as a long-term aim.

Mr Orr is due to speak at the federation's annual conference.

Fewer homes

He told housing association representatives that the dual problems of the worsening credit crunch and the contracting building industry meant it was time to recognise the target was simply not going to be met.

Instead, the federation estimated 1.6 million homes would be built by 2020.

It would take a further nine years to meet the original target.

Mr Orr said: "The prime minister was both brave and right to put the dire need for new housing centre-stage, and make it a national priority, when he took office last summer.

"However, with the global credit crunch worsening, and conditions getting tougher for all house builders, it is time to recognise that the very commendable 2020 target is now almost impossible."

Last year 167,577 new homes were built in the private and public sector.

This year the figure could shrink to 100,000.

Urgent help needed

Mr Orr warned that housing associations, which depend on private borrowing to top up government grants, will find it harder to raise money.

His organisation called on the government to increase grant support and bring forward social housing budgets to get more homes built sooner.

It also wants more measures to speed up the planning process so that properties can be built faster.

The Communities and Local Government spokesman said a series of measures had already been announced to alleviate some of the current problems in the housing market.

He said 400 million had already been brought forward to boost the spending power of providers of social housing, including registered landlords and councils.

The money should pay for 5,500 homes to be built during the next 18 months.

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