Housebuilders are proving unable to keep up with the unrelenting pace of demand for new build homes and the shortfall is likely to widen in the immediate future, with housebuilders blaming government housing policy for the current problems.

The latest set of figures from The House Builders Federation show that a total 162,000 new homes were built in 2001, 4 percent fewer than that for the year 2000. The government's own figures from the Department of Transport, Local Government & the Regions claim that the number of new housing completions was lower last year than in any other peacetime period since 1924.

Depending on whose estimates you believe, each year there is a requirement for an increase in the number of new homes being built of between 10,000 and 40,000. So in other words, to meet demand, somewhere near to 200,000 homes should have been built last year. The inflationary effects of such a shortfall are fairly obvious - relatively fewer homes and more demand equals higher average prices, with low earners the main group who will be affected.

The HBF seem to think that the blame lies with local government and the planning regime, which it claims gives too opportunity for local authorities to scrap or delay projects. An HBF spokesman said: "The cause is three-fold: investment in public housing has fallen steadily since the 1970s. At the same time greater planning restrictions on the use of land for private house building have reduced the ability of developers to make up the shortfall. Now with increasing planning gain demands, developers are being taxed for the privilege of trying to build the homes this country so desperately needs.

"The consequences are already being felt and are set to worsen. The rise in single person households will exacerbate the problem. Government initiatives to help key workers buy homes of their own have received a great deal of publicity. Unfortunately such mechanisms cannot tackle the fundamental problem of too many people chasing too few homes."