The impact will be felt by the construction industry in the next three or four years, the HBF warns.
Planning approval was granted for 115,000 houses in England last year, which is half as many as in 2006 and the lowest since HBF started the survey in 2007.
Approval was given for just 27,732 homes across England in the fourth quarter of last year, a 6% fall on Q3.
HBF executive chairman Stewart Baseley said: “This is a stark reminder as to why government must stand firm and deliver a robust and adequate planning system.
“Government has recently unveiled some very positive measures aimed at boosting housing supply, particularly the NewBuy scheme, but they cannot succeed unless we have a truly pro-growth functioning planning system.
“The new system must provide enough viable land to build the number of homes the country needs. Continuing the current record low level of house-building is storing up huge social and economic problems for the years ahead and the shortfall must be addressed.
“Building the homes we need would take millions off social housing waiting lists and enable beleaguered first time buyers to get a foot on the ladder. It could also create half a million new jobs, and give the country a huge economic boost.”
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