New homes must not be sold at a premium but be priced at a discount to the secondhand market, Savills claims.

Research by the agent in a report titled “On track to solving the housing crisis” found that just 20% of people in London and the south-east can afford to buy the average new three-bed property of around 1,000 sq ft.

The report suggested landowners need to accept lower values to boost supply while claiming developers can build and sell more when prices are discounted in comparison to the local market.

Savills says the UK is on track to deliver the Government’s target of 1m new homes by 2020, but an additional 100,000 homes are needed each year if the new supply is to have any effect on housing affordability.

It said: “Where large sites are successfully selling high numbers of new homes in less affordable areas, the homes tend to be relatively cheap.

“The average price per square foot of new homes tends to be at a discount to the average price of homes in the local secondhand market.

“Pressure to deliver at scale drives the developer towards building for the mass market. In line with this trend, three of the current highest delivery sites in higher-demand areas, Picket Twenty in Andover, Berryfields in Aylesbury and King’s Reach in Biggleswade, are, on average, priced at a discount of up to 15% from local market pricing per square foot.

“Each of these sites completed more than 600 new homes for sale in the last three years.”

The report says new homes need to be priced as a “mass market product” to ensure high sales rates, while increased land release in areas of high housing demand would reduce competition and the price for development sites, enabling new homes to be sold at lower price points.

Chris Buckle, director of Savills residential research, said: “Policymakers must take this shortfall in the south-east of England seriously if we are to finish the job of solving the housing crisis.

“Many more new homes are needed at price points that are affordable to the many, and across a range of tenures, if affordability pressures are to be eased.”