Local rather than solely national housebuilding targets should be set to address the housing supply shortage, accountancy and business advice firm PwC claims.

A report by the consultancy measured population growth relative to property and prices between 2011 and 2016.

It found that areas with the largest population increases had the biggest shortages and highest values, with London needing an additional 110,000 homes to keep up with supply over the period.

In England as a whole, half of local authorities had excess demand and half did not, with PwC suggesting that the supply problems are about building houses in the right place and not about an overall supply shortage.

The research suggests that some of the supply issues may be alleviated by predictions that UK population growth will fall from between 400,000 to 500,000 a year to 250,000.

The Government’s target is to build 300,000 homes a year by 2030.

Richard Snook, senior economist at PwC, said: “Local targets need to be set and met for house building, linked to supporting infrastructure development, as well as national targets. Building new homes in the wrong places will only perpetuate England’s housing supply problems.”

The report also predicts a softening of UK house price growth from the 4-5% of the past to around 3% on average this year – with similar rates of growth until 2025.

This implies that the average UK house price would rise from £221,000 in 2017 to around £285,000 by 2025, PwC said.

It also suggests London prices will fall in the short term, dampened by high Stamp Duty costs.

The assumptions are based on wage growth continuing at its current levels until 2025, while mortgage lending flattens until 2021 and transactions remain broadly the same over the whole period.

Rob Walker, head of real estate tax at PwC, said: “While, in theory, 95% of buyers are winners from the removal of the previous slab system, the increase in Stamp Duty for homes above this threshold appears to have contributed to an overall slowdown in the property market.

“High Stamp Duty rates are dissuading people from upsizing and downsizing which is affecting both ends of the market. The Government should look at other options to kick-start the housing market.”