The government’s housebuilding plans were in turmoil this week after its favourite think tank said its housing strategy was flawed.

The report by the Institute of Public Policy Research says Kate Barker’s review into housing undersupply and house price inflation has massively overestimated the scale of new housing required to drive down prices.

The Barker review claims that the South-east requires an extra 141,000 houses every year to reduce price growth to 1.1% a year. Yet the IPPR’s model, which uses analysis from economist Glen Bramley, a professor at Heriot-Watt university in Edinburgh, claims that an increase of just 59,000 would have the same effect.

Although still way above the current level of output (roughly 28,000 a year), the IPPR claims that its findings undermine deputy prime minister John Prescott’s strategy of setting 20-year housing targets.

The report states: “The significant disparity between these two figures would seem to call into question whether it is really possible for policy makers to set targets for output in the housing market to achieve a particular path for house price inflation in order to meet targets for affordability at the national or regional level.”

The report adds that the Barker review did not reported any detailed analysis of the infrastructure costs associated with extra housebuilding, and offered no guidance on where houses should be built.

It says: “What the UK needs is an open debate about whether as a nation we are prepared to devote the resources necessary to deliver these housing policy objectives.”