Growth in home ownership is likely to slow significantly in Britain over the next 20 years despite forecasts that homes need to be found for more than four million more households, a report claims.

The result, according to research by the charity, the Joseph Rowntree Foundation, will be mounting pressure for more homes to rent.

It forecasts that the proportion of homes that are owner-occupied will increase by just 0.3% a year, no greater than the growth during the recession of the early 1990s and well below the annual growth rate of 1.7% during the 1980s.

By 2016, the proportion of homes in owner occupation will have risen modestly from 67% in 1995 to 72%.

Maclennan: Without new accomodation, homelessness could result

The charity supports research into housing, social policy and community care issues. It said estimates of future demand for housing rented from local authorities and housing associations suggested that the 40,000 new 'social' homes currently being built each year may be less than half the level required to avoid shortages.

The co-author of the report, Duncan Maclennan, Professor of Land Economics and Finance at the University of Glasgow, told the BBC: "Our surveys suggest that those who have bought their own homes since 1992 have tended to make choices that are more considered and mature.

"Lending patterns also appear more secure than during the 'boom' years."

The Foundation believes construction of new homes for owner-occupation will average 160,000 a year.

But to meet the projected demand for new housing, the Foundation suggests that construction rates for social rented housing will need to be raised well above the current level of 40,000 a year.

In all another 50,000 to 60,000 homes a year are needed. Future housing shortages are most likely to be felt in the south and other regions that have experienced historically high rates of growth, the report said.

Professor Maclennan added: "If the present low rate of investment in affordable rental housing continues unchecked, then the opportunity to stabilise the housing market will be lost and levels of social exclusion and homelessness will be allowed to increase."

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