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The National Housing Federation also believes that, under the cuts, £45bn could be lost to the economy.
The Federation fears that, because ministers are ring-fencing other budgets such as health and overseas aid, the housing budget could be cut by up to 32.6% over the next four financial years.
Independent economists at the Institute of Fiscal Studies have said that for the Government to reduce the deficit to the extent promised, areas of spending that are not being protected may have to be cut by a third from 2011/12 to 2014/15.
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Federation modelling shows that spending cuts of 32.6% would reduce the number of affordable homes built between 2011/12 and 2019/20 from 426,000 to 285,000.
The modelling also shows that cuts of 32.6% to the housing budget could lead to 212,000 jobs and apprenticeship being lost or not created in the construction industry.
In addition, the modelling shows that cuts of a third – which would amount to £9.6bn over nine years – would lead to £45bn being lost to the economy by 2020, because public money given to housing associations in order to build affordable housing is matched by associations and then doubled in value as it is spent by people across the economy.
Federation Chief Executive David Orr said: "It is clear to everyone that the amount of public money available to fund various activities in the future is going to be tight. However, it is critical that the nation keeps building affordable housing.
"If we don’t safeguard the building of affordable homes then hundreds of thousands of vulnerable people will needlessly be added to waiting lists and more than two hundred thousand jobs could be lost or not created.
"Drastically cutting the housing budget could also imperil the fragile recovery, as our modelling shows that cuts to the housing budget of one third would automatically take £44bn out of the economy over the next ten years."
(CD/GK)
