The government needs to increase its house building target by at least 50% in order to meet demand, according to the Economic Affairs Committee.
The House of Lords Select Committee said in its new report Building More Homes that 300,000 homes need to be built each year to tackle the housing crisis.
It suggested that local authorities and housing associations must be freed to build substantial numbers of homes for rent and for sale.
The report was critical of the government’s attempts to curb the buy-to-let sector through April’s 3% stamp duty increase and the mortgage tax relief cut which is set to come into force next year.
Frequent changes to tax rules and subsidies for house purchases, reductions in social rents, and the extension of Right to Buy have also helped to reduce the supply of homes for those who need low cost rental accommodation, the report said.