Speaking at the Chartered Institute of Housing conference in Harrogate today Housing Corporation chief executive Steven Douglas said: "It is at times like these, with the credit crunch facing us, that the public sector needs to come into its own. And at the moment it is not winning back the land we need.
"It's the Governments delivery agent and it needs to keep up the supply."
But he added that the best the industry can do for itself is to have confidence.
Mr Douglas said: "The market is tightening but there is still a great deal that needs to be done. I think it's confidence that's the biggest issue in the current market."
Contracts manager at Galliford Try Phil O'Dell told Construction News: "We have convinced ourselves that there's a problem. But there is a huge demand for housing and we need to get past these negative connotations that we hear everywhere."