Housing campaigners warn the trend could deepen the housing crisis and see new building fall below 100,000 homes for the first time in almost a century.

The devastating impact of the Government’s new policy was uncovered in an  independent report, commissioned by the National Housing Federation.

The research found many town halls have scaled back plans for new homes after being advised to ignore previous targets.

Now the body representing housing association is calling for immediate action to avert a catastrophic house building crisis sweeping across the country.

Communities Secretary Eric Pickles wrote to local authorities in May outlining the Government’s commitment to abolishing regional strategies.

Earlier this month he revoked the regional targets with immediate effect saying: “They were a terrible, expensive, time-consuming way to impose house building.”

The research carried out by Tetlow King Planning found Mr Pickles’s letter in May had a ‘very significant impact’.

The Federation believes the Government’s decision to allow councils to ignore the regional targets has resulted directly or indirectly in plans to build 84,150 homes being dropped.

Only 123,000 homes were built in 2009/10 – the lowest figure since 1923. But the scrapping of the housing targets could see that total fall below the 100,000 mark for the first time in almost a century.

According to Tetlow King. the aggregate number of planned homes dropped either directly or indirectly because of the Government’s decision to scrap the regional house building targets is:

• South West – 59,750 homes
• East of England – 20,540 homes
• South East – 1,860 homes.

It also estimates that the following homes are at risk in the Midlands and North:

• Yorkshire and Humberside* – 250 homes
• East Midlands* – 300 homes
• West Midlands* – 450 homes
• North West* – 700 homes
• North East* – 300 homes.

*estimate based on research

The figure for the South West is particularly high because the regional house building targets had not been fully adopted and therefore local authorities had not had a chance to challenge the figures

Federation chief executive David Orr said: “With more than 4.5m people on waiting lists, and 2.5m people in overcrowded conditions, this is no time to downgrade the need for new homes.

“Local authorities need to recognise that just because regional targets have gone, housing need has not.

Orr called for an immediate response to the impending building crisis.

He said: “To prevent a slump in the number of desperately needed new homes, the Government should replace the regional planning system with transitional arrangements as a matter of urgency.”