Over the next five years, at least 70,000 new households a year will be unable to rent or buy market housing unless assisted.

This figure comes from real estate adviser Savills which estimates that 350,000 households in England will need some form of sub-market housing by 2020.

The government has announced a number of schemes including the Starter Home Initiative, Help to Buy and Right to Buy, but a lack of housebuilding is being blamed for the rising cost of homes.

“There can be no question that we need to boost housebuilding volumes, but these new homes need to be built across a variety of tenures to put homes within reach of those in greatest need,” says Chris Buckle, Associate Director, Savills research.

“Our concern is that new policy will result in a greater shift from sub-market rental products towards more expensive shared ownership and Starter Homes accessible only to those on middle incomes.”

According to Experian’s Property Index, between July and  September, the number of homes on sale for £100,000 or less in the UK fell by 5% while the number of properties available in the £100,000 to £250,000 category dropped by 10%.

Andy Wills, Data Director at Experian Consumer Information Services, said first and second time buyers, especially those with growing families, were likely to be most affected by the shortage.

“With this in mind, it’s vital people get into the best possible financial shape to demonstrate they are eligible for a mortgage, starting with a strong credit rating,” said Andy.

“Lenders can help by supporting people throughout the mortgage application process and getting a fuller understanding of someone’s circumstances, ensuring they are able to manage repayments for the duration of the mortgage.”

Scott Marshall of Roma Finance added that the lack of affordable housing was part of the fallout from the financial crisis.

“Affordable housing is getting less and less affordable,” said Scott.

“With fewer people being able to qualify for a traditional mortgage when the high street lenders tightened their criteria, the resulting private rental sector boomed, [and] this has meant we are now in ‘Generation Rent’, and that looks set to continue for some time.

“Who is to blame? I think it’s a combination of the financial crash and failing to prepare and anticipate the housing market crisis we’re now in.

“The government have now intervened with a promise of new housing, but that will take years to have an impact on where we are now.”

Thoughts have now shifted to how more affordable homes can be created, with an emphasis on property developers and the government working together.

“Land needs to be set aside for affordable housing in particular, and mortgage schemes such as Help to Buy developed further to offset any future changes in the market,” said Scott.

The Mayor of London has already announced areas of land which will be made available for affordable housing.

However, developers and local councils have clashed over projects to create more affordable housing, with a plan to convert West Ham United’s stadium labelled ‘insulting’ by the Mayor of Newham.

Boleyn Phoenix Limited had to revise its affordable housing offer to Newham Council after Mayor Sir Robin Wales made it clear that any proposed development on the site which did not include affordable housing would not be accepted.

Another scheme launched to boost the number of affordable homes, and is now a source of conflict between developers and councils, is Permitted Development Rights.

In September, the Residential Landlords Association criticised local councils for becoming ‘roadblocks’ to new housing developments.

Richmond Council is one such council after saying it would aim to extend restrictions to developers who are planning to convert office space into residences.

However, Scott said it was good news that the government has decided to extend the right to convert office space into residential homes, as it would increase housing numbers.

“The move potentially unlocks underused land for residential use and is consistent with the government's drive to focus housing provision on previously developed land whilst protecting the green belt,” said Scott.

Despite these policies, Robert Grundy, Head of Savills housing division, remains sceptical about the long term benefits.

“The inevitable consequence of government policy is for them to focus production on higher income groups,” said Robert.

“As a result, the supply of housing for the very poorest is likely to diminish.”

Ashley Ilsen of Regentsmead was equally sceptical about the government’s current housing policies.

“Schemes such as Help to Buy, change in stamp duty and the recent Help to Buy ISA do go some way in assisting people to get on the property ladder, however, in my opinion, it is just scratching the surface,” said Ashley.

“The government needs to do more here, however they are understandably concerned about any ripple effect this may have on the rest of the market.”