Several leading figures in UK housing have advised ministers that a “radical rethink” on housing delivery is needed if the government is to succeed in levelling up the country, as new research suggests that over the next two decades as many as 140,000 homes will be required every year particularly in the North and the Midlands.

The Building Back Britain Commission – an independent group comprising of business leaders from Barratt Developments, Legal & General, Mace, NHBC, The Riverside Group and Thakeham – has published a report which highlights how the government’s plans to level up the country will lead to a significant increase in demand for housing outside London and the South East. Meanwhile there could be less pressure on some areas of the country that have high demand, such as the home counties.

The government has set a target of building 300,000 homes a year in England by the mid-2020s.

The research, authored by former Treasury economist Chris Walker, assumes that over the next 20 years employment levels will increase in areas the government identified as most in need of levelling up and which currently have rates below the national average. The jobs boost which will result from the government’s plans to boost regional growth, will lead to increased demand for housing of different tenure for both people who are already living in these areas, as well as other people who will move to these towns and cities.

They claim that over the next 20 years around 86,000 to 140,000 homes will be needed every year in the areas government defines as most in need of levelling up – a third of this will be ‘affordable housing’

This is around an additional 13,000 to 67,000 homes every year compared to the Government’s current estimates for those areas.

Birmingham would require the largest increase in new homes. Currently, 4,829 homes a year have been earmarked under the standard way the government assesses need. This would rise to 12,430 homes a year under a scenario based on future growth.

Manchester requires the second largest increase in new homes. Using the present housing assessment, 3527 homes are needed a year. This more than doubles to 7469 homes a year based on future growth.

The Building Back Britain Commission uses the report to set out a Housing Strategy which includes a radical rethink in the way that housing demand is calculated to a model which shifts from being based on historical growth to a new ‘levelling up’ model of future need.

The report also argues for the creation of at least one ‘Construction Cluster’ in every region of the UK by 2030 to foster innovation and help train up workers in the latest methods of construction, with the first of these located in Leeds.

Terrie Alafat CBE, Chair of the Building Back Britain Commission, said: “Our results have profound implications for policy. The Government’s current housing strategy simply does not fit the levelling up agenda. It is based on past growth trends and will not be dynamic enough to meet future demand. The increase in demand in levelling up areas should reduce the pressure for new homes in other areas that are already economically developed.”