Isobel Stephen admitted doing so would be a “step change”, but said in the year to September 2015, 250,000 planning permissions were granted for new housing.
However, she also told the House of Lords’ economic affairs committee there was still a “way to go” with the construction industry.
Ms Stephen said: “The last time we delivered 200,000 new homes was in 1988, which was obviously quite a long time ago.
“Last year we delivered 170,000 additional homes, which is a 25 per cent increase on the previous year, so there is some cause for optimism that we are at least moving in the right direction.”
She added that 50 per cent of supply is concentrated in the eight largest house builders and calling for expansion from eight players that is “naturally quite an ask”.
Ms Stephen said: “We are looking at how we can help incentivise housebuilders to build more quickly and that is why the government is also very interested in new off-site construction measures to find ways of sorting that out.”
Andrew Rose, chief executive of the Homes and Communities Agency, agreed encouraging new entrants into the housebuilding market was key.
He said: “It is quite clear housebuilders will built at the pace they think they can sell, so a lot of the interventions are trying to bring new suppliers into the market and create long-term confidence.
“There is not one individual component to this, but I think for the construction industry to get to the state that it will build that number on a consistent basis, there are an enormous amount of interventions that are going on to create the confidence for them to build that.”
Over the course of the committee’s inquiry into the economics of the UK housing market it has been told 250,000 homes a year need to be built to meet demand.
Stephen Aldridge, chief economist at the DCLG, said the department has modelled how many houses would need to be built to achieve price stability.
He said: “It shows that the level of increased supply that would be necessary to stabilise house prices would be very substantial indeed and there are genuine questions over whether that would be feasible through a supply route alone.
“The model cannot actually solve the level of supply needed to stabilise affordability levels. It would be beyond 250,000 units.”
Steven Franklin, deputy director of the economics group at HM Treasury, said a lack of supply was only one reason for the rapid growth in house prices in recent years.
“What we have seen is that over the last 20 years, there has been an increase in real house prices of a factor of about two and a half times, which has generated a large capital gain for people who brought their houses 20 years ago, creating this divergence in income levels between younger and older cohorts.
“Interestingly though, not all of that will have been driven by constrained supply. At least part of that will be an unexpected increase in demand.”
