Britain’s housing shortage could be resolved if housebuilders were allowed to build significantly more new homes on the green belt, according to the Organisation for Economic Co-operation and Development (OECD).

Unaffordable housing is harming productivity which damages GDP growth and living standards, the OECD said.

The think tank also warned poor skills and a lack of investment in infrastructure and research was holding back the UK’s productivity, while it also suggested that better provision of social housing was needed ‘where private sector activity is insufficient to promote greater equity in housing access’.

Researchers said: ‘Further relax regulatory constraints to release more land for housing, in particular by thoroughly reviewing the boundaries of protected areas of the green belt and by easing skyline restrictions.’

They added: ‘Higher housing supply would improve labour mobility and reduce skill mismatches, resulting in additional income gains.

‘More investment in research and development and higher infrastructure provision would support technical progress and boost the capital stock, also enhancing progress in living standards.’