Communities Plan 'won't be enough', says Barker

Government efforts to build 200,000 extra homes by 2016 have been branded "not enough" by the economist charged with solving the UK's housing crisis.

In an interview with Housing Today, Kate Barker – appointed in April by chancellor Gordon Brown to review the constraints to housing supply – warned that as many as 146,000 extra homes each year could be needed to meet demand.

"The question we are going to have to look at very hard over the next month or so is 'are these changes going to drive the process forward enough?' "I haven't reached a definitive answer on this but I suspect it is likely that even the measures we have got – including the growth areas – won't be enough.

"I sense that the starting point of the Communities Plan needs to be rather higher. Whether that means you need more growth areas or different approaches to more aggressively developing brownfield quicker is a matter I have yet to talk about," she said.

Barker added that without "radical measures" beyond what is proposed in the Communities Plan and the Planning Bill, "there will simply be more of the same – more difficulty getting public sector workers into jobs; more people unable to move out and form their own households".

Barker – a member of the Bank of England's monetary policy committee,which sets interest rates – expressed concern that housing associations were inefficient in their use of Housing Corporation funding to build homes.

I sense that the starting point of the Communities Plan needs to be higher

Kate Barker

This reflected a detailed passage in her 208-page report that hinted at there being "fewer" associations in the future due to the poor performance of smaller RSLs in exploiting economies of scale.

Central to Barker's concerns were the problems faced by housebuilders and housing associations alike in obtaining land on which to build.

"Because we constrain land supply so much in this country and the cost of land is so expensive, it is more difficult as well for the government to supply houses because of course they have to pay the price of land. Therefore subsidy today doesn't go anything like as far as it used to in terms of units," she said.

In 2001 only 175,000 homes were built in the UK – the lowest level since World War II – and because of this shortage of supply in 2002 only 37% of new households in England could afford to buy a home.

The sole recommendation made in the review – presented on the same day as Gordon Brown's pre-Budget report – was that the government consider the use of a US property investment model to encourage more private investors into the market. Real estate investment trusts would bolster the private rented sector – seen by the Treasury as key to promoting choice for those on lower incomes.