There is an annual affordable housing shortfall of 128,000 homes, and this seems set to grow as mounting pressures on housing providers start to bite.

Construction starts in the alternative sector (predominantly affordable housing) are down by just over a third in the 12 months to September 2024.

The report finds that this situation requires a “significant step up in delivery” and that more socially rented homes are needed everywhere.

Policymakers should ensure these are provided alongside other affordable tenures, such as intermediate rent or home ownership options.

Steve Partridge, head of Savills Affordable Housing Consultancy, said: “Unmet affordable housing needs are enormous and vary between and within regions.

“Affordable homes of all tenures are required to build the homes people need and solve the housing crisis. This is important to consider as the government will create a new housing strategy for England starting in Spring 2025.”

The Savills research also shows that affordable housing needs in England have increased from 70,000 in 2015 to 187,000 in 2024. This is based on the government’s recently proposed changes to the standard method for housing needs, which adds up to 373,000 homes per year across all English local authorities.

On this basis, the research finds a shortfall of affordable house building across England, with the biggest gap in the South where an additional 62,600 affordable homes are needed each year to meet affordable housing demand.

The report highlights policy measures that can help address this situation, including restoring financial capacity to housing providers through a long-term rent settlement, clear direction for planning policy, and devolution of funding and decision-making to local authorities and regional mayors.