Attention must be given to the "four pillars" for sustainable housing growth or essential environmental services, such as water and sewerage infrastructure and flood protection, may begin to fail, according to the Environment Agency.

In two related reports released today, the Environment Agency sets out the need for the Government, regional assemblies, local authorities and developers to follow the "four pillars": get the location right, plan for the longer term, reduce demand for new infrastructure, and secure funding for environmental infrastructure early.

Hidden Infrastructure: The pressures on environmental infrastructure, and the supporting policy report, also highlights the cost of providing environmental services to cope with the development of new housing. Taking into account population and demographic changes, an average of £20,000 will be needed for each new home in the south east of England to protect water quality and provide water, waste management and flood protection.

Chief Executive Barbara Young said towns and cities needed to expand in the future, and growing communities must have the right environmental infrastructure to support them.

"While we all know that communities can't function without infrastructure such as schools, transport and hospitals, we have to remember that behind every community lies a network of essential environmental services. Without these, our homes and neighbourhoods would be unsustainable. These services provide clean water, handle our waste, drain our sewage and protect us from flooding but they are often taken for granted," Barbara Young said.

"Our research suggests it could cost about £20,000 for each new home in the south east to support housing growth and protect the environment. But by following the four pillars - which focus on development being in the right place, well designed and built for the long term, as well as the need for greater resource efficiency - this may drive down the cost.

"There has been a historic legacy of under-investment and poor maintenance in water and sewer capacity. Last year, nearly 5000 properties were flooded by sewers and more than 3500 million litres of water a day was lost through leaks. There is an urgent need to reduce the amount of waste going to landfill and the unavoidable impacts of climate change will increase the risk of flooding.

"New growth can be achieved without harming the environment, but with all of these pressures, early investment and careful planning is critical - or we risk seeing our environmental infrastructure beginning to fail."

The Environment Agency has already worked with the Government in making sure the environmental infrastructure to support new homes is adequate.

Barbara Young said: "It was important to work with the Government on the assessments of the New Growth Point submissions last year, as it allowed environmental issues to be identified at the earliest possible stage.

"Initial assessments of the 29 New Growth Points showed environmental constraints and demand for additional environmental infrastructure. Flood risk was an issue in 80% of cases, there was a lack of sewerage capacity for 72%, and potential breaches in water quality standards for 62%.

"Early assessment allowed proper conditions for meeting these infrastructure needs to be applied. On occasions, it may be difficult to accommodate further growth because of the impact on the environment," Barbara Young said.

In its policy report, the Environment Agency calls for a number of actions to be taken to help deliver successful new housing and protect the environment, including:

§                     25-year planning for sewerage and wastewater infrastructure that look beyond the usual five-year planning horizon

§                     Reform of the charges that developers pay for connecting domestic properties to water and sewerage services for the first time. The charges could be designed to help provide incentives for more water efficient housing

§                     A wide range of funding options to be considered through Section 106 planning agreements, the proposed Planning Gain Supplement and the next 2009 Water Price Review

§                     The acceleration of water metering in water stressed areas and the potential use of targets for water efficiency that help to drive more efficient and sustainable use of water resources

§                     Better forecasting of new housing development (that accounts for growth area and new growth point proposals) in water company plans

§                     Rigorous assessments of the environmental impacts and the viability of infrastructure dependent solutions before plans for growth are adopted

§                     Rigorous application of the new planning policy guidance on development and flood risk (PPS 25) that should steer development towards areas of lowest flood risk first.