Even if extra homes are built, affordability will remain an issue

The independent body set up to advise ministers on new homes said 270,000 more were needed each year.

The National Housing and Planning Advice Unit said average prices in England were more than seven times average salaries.

And it said they were set to reach nine-and-a-half times this by 2026.

Bleak outlook

It added that, even if the extra homes were built, they would still be less affordable.

This could have horrendous consequences in terms of environment, landscape and also quality of life

Kate Gordon

Campaign for the Protection of Rural England

Professor Stephen Nickell, who helped write the report, told the BBC: "We built more than that number back in the 1930s in Britain when we had a considerably smaller population.

"And most other countries in the developed world, proportionately speaking, build houses at a faster rate than we do."

The report comes on the same day as Housing Minister Yvette Cooper unveiled funding to encourage local councils to help create new homes.

She said that some councils were being difficult about building new houses.

"Some of them say they don't want more homes in their area, and the problem with that argument is that it's just not fair - every other area needs to do its bit."

The plans have been criticised by the Campaign for the Protection of Rural England (CPRE).

Senior planner Kate Gordon said: "This could have horrendous consequences in terms of environment, landscape and also quality of life - traffic congestion, pollution and the like.

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"There are also issues like access to water supply for these homes and the likelihood of them being built in flood-risk areas."

She said development should not be foisted on the country's most pressured regions, calling instead for a planned approach which made better use of existing buildings and derelict land.

Empty properties

Ms Cooper said councils intending to build the most new houses would be given £1,100 per home, and this may increase to £5,000 by 2010/11.

She also said that housing had to be "planned sustainably".

It's no good building houses if there's no roads to get to them

Councillor Paul Bettison

But councillor Paul Bettison, from the Local Government Association, said simply building more homes was not the answer.

"For too long we've been pushing the simple figure of more and more houses, without thinking about the infrastructure.

"It's no good building houses if there's no roads to get to them."

Also included in the plans is a £510m fund to help bring empty homes back into use.

Councils who aggressively target empty properties, including through compulsory purchase orders, will share in the fund to help pay for the projects.

There are an estimated 670,000 homes and properties currently standing empty, and nearly 300,000 in England that are long-term vacant.

The initiative will funnel extra money to regions where the increase in new homes is more than 0.75% of the existing stock.