Report says one-in-10 will need social housing

Almost one in 10 people in England and Wales could be on the waiting list for social housing by 2010 due to a spike in repossessions and a slump in private house building and mortgage offers, a report warned on Friday.

According to a study for the Local Government Association (LGA), a lobby group for English and Welsh local authorities, the number of people needing subsidised accommodation is likely to rise in the next two years by 1 million people to around 5 million.

A spokesman for LGA said this was possibly the highest total on the social housing waiting list since the 1940s, when a country ravaged by the bombing campaigns of World War II embarked on a comprehensive urban reconstruction.

The report said some 400,000 extra households will be competing for housing association and council homes by 2010 as the economy slowed and people lost their homes.

It said councils were already struggling to cope with a 600,000 rise in the number of households on the waiting list to 1.6 million over 2001-2007, as more people got priced out of the housing market.

The private housing market now had the potential to be a double-edged sword as prices corrected and mortgage holders struggled to meet their monthly payments and lost their homes, the report said.

The housing market, which has tripled in value in the past decade, has slowed rapidly in the wake of the global credit crunch. Analysts see falls of 10 percent or more this year.