An additional 187,000 affordable homes are needed in England each year, yet affordable house building seems to have peaked, according to the latest Savills research.

There is an annual affordable housing shortfall of 128,000 homes at present 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 this situation requires a “significant step up in delivery” and that more social rented homes are needed everywhere. Policy makers should ensure these are provided alongside alongside other affordable tenures, such as intermediate rent or affordable home ownership options.

Steve Partridge, Head of Savills Affordable Housing Consultancy, said: “Unmet affordable housing needs are enormous, and they vary between and within regions. Future housing policy should be sufficiently flexible to recognise regional variations with grant funding directed towards supporting new homes that will have the biggest impact on people’s housing challenges.

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

The Savills research also shows that affordable housing need in England has 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 need which adds up to 373,000 homes per year across all English local authorities.

On this basis, the research finds that there is a shortfall of affordable house building across England, with the greatest 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.