Britain's grand plan to throw up 1.5 million new homes by the end of this parliament has collided with an inconvenient truth: you can't build houses out of drought. This week, half of England was officially declared to be in serious drought for the second consecutive year, and the Environment Agency is wringing its hands about the economy, environment, and wildlife. Naturally, the regions suffering the most extreme water stress - with hosepipe bans and crumbling pipes - are exactly where the government's 'build, baby, build' agenda is aiming its bulldozers.

In Basingstoke, where the council is being told to build more than 1,000 houses a year, the Independent leader Paul Harvey has taken to stating the obvious: 'We cannot magic up more water.' He's not wrong. The council's water cycle study found that demand from new housing may outstrip sustainable supply - a conclusion that required years of research and a few spreadsheets. Meanwhile, the Environment Agency has banned South East Water from taking more water from the Greywell chalk aquifer, and the company is appealing. Because nothing says 'sustainable development' like fighting in court for the right to suck the ground dry.

Elsewhere, the situation is equally dire. In Cambridgeshire, chalk streams are being artificially topped up by the Environment Agency, which is like bailing out a boat with a thimble while someone drills holes in the hull. The 5,726 residents of Waterbeach - where another 4,500 homes are planned - are under a hosepipe ban. And in Kent's Tonbridge and Malling, South East Water says there's simply not enough water for the 19,000 homes demanded by 2042. Matt Boughton, the Conservative council leader, summed it up nicely: 'You can drill as many boreholes into aquifers as you want, but if the water isn't there, you are still trying to extract the same natural resource from the ground which isn't available.'

The government's solution? A water credit scheme in Cambridgeshire where developers pay to offset their water use. Two years in, the scheme isn't operational, and no developer has paid a penny. Critics are not impressed. Sam Davies, a former Cambridge city councillor, notes the absurdity: 'Residents are being told: "Don't fill up your paddling pool, the splash pool is closed because there is no water." But commercially that growth is just ripping away at speed and no one wants to talk about the lack of water.'

Pippa Heylings, the Lib Dem MP for South Cambridgeshire, puts it more bluntly: 'If you want growth then water is a deal breaker.' The government, for its part, insists a 'water delivery taskforce' will sort it all out, and that water companies have a duty to plan and deliver infrastructure. But as Paul Harvey points out, the investment that should have built pipelines and upgraded treatment works was 'siphoned off to shareholders and executives.' Now the bill has come due, and it's not payable in goodwill.

In the end, the housing crisis is meeting the water crisis, and neither is backing down. The government wants homes; the environment wants to not collapse. Something's got to give - and it's probably going to be the hosepipe ban, extended to cover all of England, forever.