The number of new homes delivered this year could fall by 84,000 according to forecasts by Shelter.

Analysis by Savills on behalf of the housing charity predicts that output will drop from 255,000 last year to 171,000 in 2020/21.

Shelter’s warning comes ahead of a speech by the Prime Minister in which he is set to call for the country to announce a £5bn infrastructure investment plan which has been dubbed a “new deal” for Britain after Franklin D. Roosevelt’s famous spending programme to get the US out of the Great Depression in the 1930s.

However, the Savills research estimates that, without urgent government action,116,000 construction jobs could be lost by 2020/21 as housebuilding stalls. 

In a worst-case scenario, the report also shows the government could fall significantly below its own housebuilding targets, with as many as 318,000 new homes lost over the next five years.  

The research suggests that initially construction will be held back by necessary social distancing on building sites, but as the Covid crisis wears on and the UK enters a protracted recession and aspiring buyers’ finances are hit, housebuilding is likely to be constrained by reduced demand for property at market prices.

Shelter is warning that the housebuilding slump will have dire consequences for the provision of new housing, particularly much-needed social homes. 

Unless the government intervenes, a paltry 4,300 social rent homes could be delivered in this financial year, a yearly drop of 30 per cent. 

This would be the lowest number of social homes built in any year since World War II.

Just over 4,000 social homes would not even be enough to house those families currently waiting for a social home in Wakefield, never mind the rest of the country, the charity claims.

Shelter is urging the government to bring forward the £12.2 bn already promised to be spent over the next five years under the Affordable Homes Programme. 

By fast-tracking the cash and spending it in just two years on building social homes it could plug the gap and save tens of thousands of jobs.  

Shelter chief executive Polly Neate says: “As the government prepares a major push on infrastructure and investment, it has a perilously short window to avert a lengthy housebuilding crash that will wipe out tens of thousands of new homes and jobs. 

“By bringing forward planned spending and building social housing the government has the chance to avert disaster. 

“There are over a million households on social housing waiting lists, and even more likely to join them as the recession bites – making the case for social homes self-evident. 

“The pandemic has shown that a safe home is fundamental, but just not enough people have one.  

“As part of the Prime Minister’s ‘build, build, build’ speech tomorrow, he should bring forward the spending promised under the Affordable Homes Programme. 

“This would stimulate the economy, save jobs, and most importantly provide the social homes we urgently need. We can and we must build this country back better.”