Inspector Simon Emerson said that further examination hearings on Eastleigh Borough Council’s local plan would not go ahead after he identified "important shortcomings".
The document proposes a minimum of 10,140 new homes between up to 2029, equating to 564 a year.
But Emerson said the housing target should be higher because the council "has not recognised the full extent of affordable housing need in the borough".
Emerson described the council’s failure to recognise the "true scale" of the borough’s affordable housing need and how to address it as "a serious shortcoming".
Secondly, he said, there were "market signals which indicate that some additional market housing is required".
Household projections, the basis for a local plan’s housing need figure, he said, "should be adjusted to take into account market signals", in line with national planning policy.
Emerson said that market signals justified an uplift of about 10 per cent above the original housing need figure.
A further concern was the plan’s "inadequate" five year land supply position.
Emerson said the council needed to add a 20 per cent buffer to its land supply figure, because of past housing under-delivery.
The council could either withdraw the plan or suspend the examination for up to six months, Emerson said.
A council spokesman said the authority would consider its options and hoped to recommence the examination "as soon as possible".
Lib Dem council leader Keith House said: "It’s worrying that the inspector requires us to plan for probably 1,000 more homes over the life of the plan."
The inspector's letter can be found here.