The gap between the number of homes being built and demand to buy has increased by 370,000 in the past five years in England.
A study by the government’s National Audit Office revealed that just 54% of the new homes needed have been built since 2011.
Between 2001 and 2010 an average 144,000 new homes were completed, 100,000 fewer per year than in the 1970s.
The department optimistically projected that 227,000 new households will be formed each year between 2022 and 2021.
The report said: “For housebuilding to match future need, it must increase in most parts of the country; this is particularly acute in London.
“Since the 1980s, demand for housing in England has increased.
“Housebuilding, however, has not kept pace with demand.
“Public sector housebuilding has fallen and the number of homes added by the private sector has been vulnerable to both economic recessions and the cost of finance to potential homeowners.”