Capital Economics has been commissioned by Shelter to research and report on the financial mechanisms that could lead to additional investment in affordable housing. In Britain, there are simply too few homes in the right locations and we are not building new properties fast enough to close the gap, with an estimated shortfall of over 100,000 newly built homes each year. The misalignment of supply and demand is driving property prices up at a much higher rate than incomes. Indeed, the ratio of house prices to income has risen in fourteen of the last eighteen years. ‘Affordable housing’ has an important role in ensuring accommodation for individuals and families who might otherwise be priced out of the market.