It's time to use public land

She told 700 guests at the lunch that while the planning system has improved local opposition to development is still putting the brakes on housebuilding.

Major political parties have put housebuilding high on the agenda, as Labour has pledged to build 200,000 homes per year, while the Conservatives want to build 200,000 cut-price ‘starter homes’ for first-time buyers by 2020 and also plan to extend right-to-buy.

Barker said: “Despite measures such as the new homes bonus, the costs of new supply remain largely local and are perceived as large, whereas the benefits are small in the short term and geographically dispersed.

“It may depress you to hear a plea for greater reliance on the state to act – but the planning system suppresses the market mechanism so much that it is hard for it to deliver.”

She added that over the next five years mortgage lenders will see significant demand, although she warned against the impact of a Bank of England bank base rate rise.

Barker said: "The issue will be whether the income growth prices more people back into the market than are priced out by the higher bank rate.

“If we get productivity growth back – this would be unexpected good news".

CML chairman Moray McDonald of the Royal Bank of Scotland said that getting the supply side sorted "once and for all" needed to be the key priority of housing policy.

He added: “Dealing with the supply side, in my view, has to be our new "North Star" which everyone aims for.

“To get there, we need a housing strategy that commands all-party support with a three-line whip from national government down to the parish council to ensure it's implemented.

“That strategy should come from us, the industry, in partnership with government. Fix this, and the market itself will address affordability."