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The north of England is set to lose out on billions of pounds of investment because the Government has miscalculated the number of new homes needed, experts warn today.

Housing bosses say at least 55,775 new homes need to be built a year in the north to meet demand.

But the Government is planning to build only 42,435 houses a year in the region, an analysis has found.

Homes for the North, a consortium of 18 housing associations, says this is 13,000 fewer homes than needed and will mean 16,000 fewer construction jobs and a £2.37billion loss in economic output.

The organisation says 500,000 new homes need to be built in the north over the next ten years.

An analysis for Homes for the North by planning consultants Lichfield found the Government’s formula for calculating the number of homes needed in 72 councils in the north was based on “flawed” statistics.

It says the figures were drawn up during “a period of sluggish economic growth” and do not accurately reflect the true demand.

(Image: PA)

Critics said the government’s target also undermined its pledge to build a Northern Powerhouse.

Shadow Housing Secretary John Healey MP said: “Ministers’ flawed housing targets are a cap on northern aspiration.

“Ambitious northern areas want to build for the future, but changes set to be made by ministers will make it harder for them to do that.

“The housing crisis is a national crisis. Home-ownership has fallen in every region since 2010, and there is visibly rising homelessness in almost every town and city in the country.

“The Chancellor should use the next Budget to reverse the deep cuts in housing investment made since 2010 and back northern areas to build.”

Carol Matthews, chair of Homes for the North, added: “As our great northern cities continue to thrive both economically and culturally increasing numbers of people are moving to places such as Manchester, Leeds and Newcastle.

“One of the main attractions - especially for younger people - is the availability and affordability of homes.

“In the next ten years, the north will need 500,000 new homes to keep up current demand. Yet government policy isn’t geared up for this.

“The way future housing need is planned for fails to recognise future growth prospects of cities across the north. This needs to be addressed immediately.

“Failure to do so will hold the north back – and it is the next generation who will pay the price.”

A Ministry of Housing, Communities and Local Government spokesman said: “Our new approach is not a target, and we want to see ambitious northern councils building far more homes.

“We want to see the north thrive with thousands more homes, jobs and better transport links.”