More than 200,000 households are projected to join waiting lists for social housing by 2011, as the recession fuels demand – taking the overall number to a record high of around two million.

New research by the National Housing Federation, which represents England’s housing associations, shows rising unemployment and repossessions will have a dramatic impact over the next two years.

The Federation says that the effect of the recession, coupled with the on-going under-supply of homes across the country, will lead to an overall total of 1.97 million households on waiting lists.

Social housing waiting lists have rocketed by 55% over the last five years. But the recession threatens to make a bad situation worse, as the number of households on waiting lists is predicted to jump from 1.77m in 2008 to a record high of around two million in 2011.

This means that the number of people on social housing waiting lists will have doubled from 2001, when there were just over one million households waiting for a social home.

Around 80,000 of the expected new households on waiting lists over the next two years will be directly attributable to the downturn. The other 120,000 households will join because of the on-going general lack of affordable housing, across the country, with some commentators saying that England has a shortfall of around one million homes.

The last recession in the early 1990s saw waiting lists for social housing rise sharply as unemployment and repossession rates increased. However, with forecasts indicating the current downturn could be deeper and more prolonged, the growth in demand for affordable housing could increase even more rapidly.

To make matters worse, the Federation is predicting that house building will slump by 50% during the next financial year from 140,000 to 70,000, as private developers mothball hundreds of developments. Under government plans, the aspiration is that 240,000 new homes are built each year from 2016.

The Federation says the expected boom in waiting lists, shows that the Government should quickly adopt the proposed house building fiscal stimulus package, tabled three weeks ago by a range of organisations, including the Federation – under the banner of the 2020 Group. Under these plans ministers would spend £6.35bn to fund the building of 100,000 social homes over the next two years.

Federation director Ruth Davison said: “We are currently witnessing a dramatic surge in the demand for social housing, as the recession really starts to bite.

“The housing crisis is now so great that, unless dramatic action is taken, it may take decades for the nation to recover.

“The fact that waiting lists are set to double between 2001 and 2011 shows that we simply have not produced the number of homes we so desperately need.”

She added: “The only way to start to address this issue is for the Government to implement our proposed house building fiscal stimulus package, through which ministers would spend £6.35bn to fund the building of 100,000 social homes over the next two years.

“Not only would this deliver thousands of urgently needed homes, but it would also kick-start the economy.”