The housing crisis in the West Midlands is showing little sign of recovery, new Government statistics have revealed, with less than half the new homes required being built.

Figures released by the Department for Communities and Local Government show a demand for 18,000 new West Midlands households a year, but only 7,690 were built in the year to December 2011, down by 5.6 per cent compared to a year ago.

Gemma Duggan, West Midlands lead manager for the National Housing Federation, said an increase in housebuilding would provide an economic boost, as well as fulfil a demand in the region.

She said: “These disappointing figures show we’re missing a real opportunity. Building new homes would tackle the housing crisis and spur local economic growth by creating jobs and supporting small businesses.

“Affordable housing can play a key role in kick-starting the local economy. As well as providing homes for people stuck on waiting lists at the lowest cost to the public purse, it also helps to tackle social deprivation and builds stronger communities. It’s a win-win for the taxpayer.”

Modelling by the National Housing Federation (NHF) has shown that a public investment of £1 billion – matched by £8 billion from housing associations – would build 66,000 shared ownership homes in the UK for people on low to middle incomes.

This would create 400,000 jobs and, in doing so, save the taxpayer £700 million in jobseeker’s allowance, it claims.

The NHF said the average house price in the West Midlands is £177,913 – nine times the region’s average wage. Currently the region has 157,000 families stuck on housing waiting lists, and has experienced a 14 per cent increase in over-crowding over the last two years.

Ms Duggan said: “The fact is the UK is building fewer homes than at any time since the Second World War. Housing must be treated as a top political priority.”