Quarter of households in parts of UK overcrowded, says Shelter

Number of overcrowded homes doubles in a decade with families in West Midlands and London worst hit, says charity

More than one in four households in some parts of the UK are officially overcrowded – with 400,000 more families being classified as cramped since 2010, according to an analysis of the latest census data.

Shelter, the homeless charity, found that 1.06m households in England – almost 5% of the population – were classed as overcrowded, with the West Midlands and London accounting for almost half of families living in congested conditions.

With house prices outstripping income levels by three times in the last decade, the number of overcrowded households has doubled – the 2001 census recorded 500,000 homes with not enough space.

In 2011, the government's English Housing Survey estimated that over the three years from 2008 the average number of families living in homes considered too small for them was 655,000.

The census reveals that families face a big squeeze in the capital. The most overcrowded part of the country is the east London borough of Newham, where more than 25% of the 100,000 households live in accommodation that's too small for them. In Brent, almost one in five live squashed too closely together. In Leicester, the most overcrowded part of the country outside of the south-east, it's one in 10.

Concern is growing over how a lack of room can affect life chances. Research shows that overcrowding can have profound effects for children: underachievement at school caused by lack of space to do homework; illness caused by cramped living conditions; and a lack of privacy leading to depression.

The single biggest concentration of overcrowded housing was Birmingham with 37,000 properties deemed to have not enough rooms. Twenty-five local authorities had more than 10,000 households that were by the official measure "too cramped".

Campbell Robb, the chief executive of Shelter, told the Guardian it was "shocking that in the 21st century overcrowding is a problem that is getting worse".

"As millions struggle with the high cost of renting or buying a home, overcrowding is yet another symptom of our housing crisis. Behind closed doors, hundreds of thousands of children are suffering in cramped conditions with no space or privacy," he said.

"Finding somewhere to play or do homework becomes almost impossible, inflicting lasting damage to children's education and future chances in life."

Experts say that increasingly families are confined to homes that a generation ago would have been thought too small to live in.

Many argue that too few homes are being built at a time when the population is expanding. And the homes that are being put up are smaller.

In a statement, the Department for Communities and Local Government (DCLG) said it was "completely wrong and misleading" to compare statistics from the census with the English housing survey – arguing that each uses different methodologies and time periods to estimate overcrowding levels. "One is simply not comparing like with like. We have suffered from a dysfunctional housing market for at least 15 years, and that's why we're pulling out all the stops to get Britain building and deliver the affordable homes to rent and buy that this country needs."

Last year, the Royal Institute of British Architects calculated that the average new three-bedroom home was only 92% of the recommended minimum size – missing the space equivalent to a single bedroom that could comfortably accommodate a single bed, bedside table, wardrobe, desk and chair.

The UK, notes Riba, is one of the few western European nations to have no minimum space standards for housing. In Britain, overcrowded homes are those that fail the "bedroom standard" – a formula that calculates how many bedrooms are required for the numbers of adults and children living there – taking into account the relationships of household members to one another.

Stephen Battersby, chair of the Pro-Housing Alliance – which lobbies for greater access to healthy and affordable homes, said "overcrowding will get worse".

Battersby argues that welfare cuts will mean the poor will cram into houses rather than move out of areas where their family and friends live. He said coalition policies would not lead to a "big rise in buildings for families".

Jack Dromey, Labour's housing spokesman, said: "Families who don't have space to sit down for a family meal or room for the kids to do their homework are paying the price of this government's failed economic policies and failure to build the homes the country needs."

A spokesperson from the DCLG said the government was investing "£19.5bn in public and private funding in an affordable homes programme set to deliver 170,000 new homes".