House building at record low

Building began on just 635 private homes in London last month, the lowest figure since records began.

The National House Building Council, which registers all new homes, found private starts were outnumbered by the 659 social homes on which work began in the same month.

For the three-month period from June to August this year, there were 2,769 social houses compared with 1,743 private ones in the capital.

NHBC chief executive Imtiaz Farookhi said: "The social housing sector is currently showing more resilience to the downturn."

The crisis in private house building, which blows a hole in the Government's proposal for three million new homes by 2020, was highlighted in late June when a number of leading builders announced that the credit crunch and mortgage problems had caused a slump in sales.

Companies including Persimmon, Barratt, Bellway, and Taylor Wimpey saw their share prices savaged and were forced to cut thousands of jobs.

The value of Britain's seven biggest builders listed on the stock market crashed by nearly 90 per cent in the 18 months to this July. The Government's so-called "rescue plan" for the housing market has had little impact so far and is not expected to revive the market in the near future.

Steve Turner of the Home Builders Federation said: "We need decisive government action that will get liquidity back in the mortgage market."

In the south-east region outside central London, NHBC recorded a 50 per cent fall between June and August this year compared with the 8,768 homes started in the same period last year.

Only 2,229 private homes were started and 2,186 social units.