Britain is set to face a shortage of a million new homes within the next 20 years, experts have warned.

A report by the Joseph Rowntree Foundation published on Tuesday predicted that unless the current rate of house building is dramatically increased only the wealthy will be able to afford their own homes.

The report warns that public sector workers will be increasingly priced out of the market.

Research found that the supply of the UK's housing is falling behind demand faster than previously recognised and that the South East will be hit hardest as it contributes 70 per cent of all demand for homes.

The foundation also calls for an "urban renaissance" in the Midlands and the North where there are areas experiencing negative equity because of a collapse in the housing market caused by urban blight.

Demand for extra homes in Britain is now estimated at around 210,000 properties-a-year but the number of new homes built by property developers and housing associations is just 154,000-a-year.

This will lead to a shortfall of 1.1 million houses by 2022 if the trend continues unchecked.

The hardest hit are poorest families in the south east who cannot afford to buy and have no access to oversubscribed rented accommodation provided by local authorities.

Lord Best, director of the Joseph Rowntree Federation, said it was time for ministers to take action.

"These genuinely shocking statistics show why the time has come for policy makers to recognise that a plentiful supply of new and affordable homes is of the greatest importance to the nation's health and prosperity," he said.

"The bulk of the new homes could go on recycled 'brownfield' sites but this will only happen if there is positive planning, land assembly and decontamination of polluted sites."

"Investment in our older areas is vital on environmental as well as social and economic grounds. Housing shortages are set to become one of the most significant social issues of the next 20 years. Unless we act now, shortages will lead to overcrowding and homelessness."