House-building hits 50-year low as lending slumps again

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The Independent Online

Britain's struggling housing market remains mired in recession, with house-building at a 50-year low and mortgage lending falling last month, official figures revealed yesterday.

The Department for Communities and Local Government said construction began on just 18,340 homes during the first three months of the year, 44 per cent down on the same period last month.

The number of homes started over the year to the end of March was 133,710, a reduction of 20 per cent compared to the previous 12 months.

The total is barely over half the Government's annual target of 240,000 housing starts, which it needs to hit every year until 2016 to achieve its policy goals.

The Conservatives said the figures were the worst seen in the housing market since 1953, while Sam Younger, the chief executive of the housing charity Shelter, said: "House-building has now slumped to one of the lowest levels for more than 60 years: not since the end of World War II has the gap between the need for new housing and the number of homes built been so great."

The downturn in the house-building market reflects the lack of mortgage finance available to property buyers, with figures published yesterday by the Council of Mortgage Lenders suggesting the market remains tight.

Mortgage lending totalled £10.4bn in April, the council said, 9 per cent down on the previous month and 60 per cent below the level of advances seen in April 2008. It said the figures had been skewed by the fact that Easter fell in April this year, rather than March as it had done in 2008.

However, Michael Coogan, the council's director-general said: "It is still too early to spot a clear pattern of housing market recovery as some commentators have suggested – activity remains weak."