Construction industry output fell by 0.5% in November to put even greater pressure on the UK housing market.
The shortage of properties for sale is one of the main factors driving house price growth and worsening affordability problems for first-time buyers.
With the construction industry struggling to increase supply, prices are now likely to rise even higher.
While total output fell by 0.5% compared to October, new work fell by 0.7%.
Year-on-year, total output in the construction industry has fallen 1.1% since November 2014.
Andrew Bridges, managing director of Stirling Ackroyd, said: “Housing is surfacing as the deepest and most troubling challenge for the whole UK – our greatest cities need to grow, and a whole generation need somewhere to live.
“In particular, our capital city is constrained and limited by a sharpening shortage of affordable and quality homes."
Bridges said there were too many planning obstacles in the way of development, especially in London, which was stifling growth.
“For a generation yearning to own a home in London – the clock is ticking. And for all contenders in London’s mayoral elections, the clock is ticking too. May is not far away. Housing is the battle ground.”
Owen Goodhead, managing director of specialist construction recruiters Randstad CPE, said: “The UK literally needs an army of builders. Or more precisely, 12 armies – given the need for a million extra construction workers by 2020.”
To get anywhere near that target, the UK needs a radical training programme, he said. “Projects planned for the next few years, from infrastructure to the housing challenge, will be competing against one another for the right people to do the job.
“Skills shortages will define UK construction and engineering for years to come – if not decades.”