The pace of growth in private housing slowed in the last three months of 2013, according to the latest economic survey from the Federation of Master Builders.
Commenting on the results of the FMB's State of Trade Survey for the final quarter of 2013, Brian Berry, chief executive, said: "Despite a sustained recovery for small building companies right across the UK, the growth in new house building slowed down in both the public and private sectors, which is a worrying indicator that we are failing to build the homes that are desperately needed. This is despite the rise in demand and the chronic shortage of new homes."
Mr Berry added: "For decades Britain has fallen way short of building the number of new homes that we need. Policies such as the 'Help to Buy' scheme have begun to revitalise the housing market and reinvigorate demand but more needs to be done to increase supply and encourage smaller house builders to build more homes.
"Measures to boost the availability of land; ease the regulatory burden; and improve access to finance all need urgent attention."
He concluded: "The prospect of continued rising overheads is also a major concern with around 43 per cent of builders saying they may have to put up their prices to customers in the next six months.
"The Government could help by reducing the rate of VAT from 20 per cent to five per cent on all housing renovation and repair work."