The firm said the government should mobilise local authorities and associations and incentivise private constructors to build “thousands” more affordable homes and prevent an acceleration of the current housing crisis.
It blamed the old government for “procrastinating on this crucial issue” allowing house prices to rocket to “stratospheric” levels over recent years.
A new government was formed by Prime Minister Theresa May in July after David Cameron’s resignation from the top job. This followed the historic EU Referendum in June, which resulted in Britain voting to leave the EU.
L&G’s comments came after a report from the Local Government Association (LGA), out on 28 July, warned millions of working people will need access to some type of affordable housing by 2024 as they will no longer be able to afford somewhere decent to live.
The association, which represents more than 370 councils in England and Wales, warned a minimum of 3.98 million people of working age will need access to affordable housing even if the country is able to achieve full employment by creating jobs and upskilling people.
Should the economy not create the jobs projected, that figure could rise to 5.4 million people, with the likely demand ranging from 2.25 million to 3.07 million, compared with 2.87 million in 2011, according to the association.
However, overall demand will be greater when taking into account those not working, such as pensioners.
MPs are already in the process of investigating the housing industry’s capacity to build new homes after the government missed its targets for 2015 by more than half.
The government had previously said 275,000 new affordable homes were needed to ease the UK’s housing shortage. But figures released last August, showed a mere 131,060 new homes were completed in the year.
The Communities and Local Government Committee, which launched the inquiry, said it wants to find out whether the industry is able to build enough houses in principle or, if not, what constraints it is facing and how they can be overcome.
But councillor and LGA housing spokesman Peter Box said while the private sector had an important role to play in the sector it could not build all the houses needed on its own.
He said: ”Bold new action is needed to solve our housing crisis following the vote to leave the European Union. A renaissance in house building by councils must be at the heart of this.”
The LGA wants councils to be handed greater powers to build new homes, such as to be able to borrow to invest in housing and to keep all of the receipts from properties sold through Right to Buy to build new homes.
Meanwhile, L&G has started manufacturing its own wholly factory-built homes. The provider said it will invest £55m in the development of a factory near Leeds, which is expected to produce 3000 houses or 4500 flats a year.
L&G housing partnership director Stephen Smith said: “For far too long now, we have not been building the homes we need to meet the rising demand for homeownership. The impact of this has shown itself in the stratospheric rises in house prices that we have witnessed over the last few decades.
“A stable housing market is one that sees house prices growing in line with inflation. With the recent changes in Government, there is an excellent opportunity to make a break from past failures and commit to delivering on some very important housing promises.
“If we keep procrastinating on this crucial issue, we risk millions more facing a housing crisis.”