Merton is facing the most severe housing crisis in London, with just one per cent of expected housing demand over the next decade catered for by planned new homes.

The shocking figures released by real estate company CBRE reveal Merton's population is expected to grow by nearly 20 per cent over the next five years - about 15,000 extra households.

However, currently planning permission has only been granted for 751 homes.

The predicted growth of the rental market over the next five years is also the highest in London at 33.8 per cent.

Rents are expected to rise significantly, outstripping expected wage growth and forcing tenants to spend on average 72 per cent of their income on rent.

This compares to 37 per cent in Sutton, 38 per cent in Kingston upon Thames and 56 per cent in Lambeth.

Steve Parsons, head of residential at Andrew Scott Robertsons estate agents in Wimbledon said they currently have 25 buyers registered for every property.

The estate agents kicked off their first working day of the year on Monday with 40 property viewings.

He said Merton, and Wimbledon in particular, is an attractive location for home-buyers because properties at the lower end of the market increased in value by 15 or even 20 per cent very quickly during the first part of last year.

So those buying to let - about 25 per cent of their customers - can make a profitable investment even if the rental return is traditionally lower than for properties in south east London, at about four per cent.

Councillor Andrew Judge, Merton Council's cabinet member for regeneration, said the council has achieved the Mayor of London's housing targets but admitted the borough faces a housing crisis.

He said: "We have got a housing crisis in London and Merton and we must do our best to indentify particularly under-used land where we should build houses."

Three large-scale development proposals are currently in the pipeline. Housing association Circle Housing Merton Priory wants to redevelop three estates in Mitcham, Morden and south Wimbledon.

If approved by the council, the redevelopment would add about 1,200 extra homes to Merton over approximately 10 years.

If AFC Wimbledon's bid to return to the borough with a new stadium in Plough Lane is successful, an extra 600 flats will be built by Galliard Homes as part of the development.

An extra 230 homes could also be built in Raynes Park as part of a proposed redevelopment of the Rainbow Industrial Estate.

However, the developments represent just a tiny fraction of the borough's housing need, as London's population is on the brink of all-time high of 8.615m, above the previous 6.6m peak on the eve of the Second World War.

Coun Judge said the council will be innovative in thinking about where it can build new housing, focusing on disused land such as garage sites built in the 1950's which are no longer used.