House building takes big tumble

The number of new homes being built in the West Midlands has plummeted by more than half in a year, new figures reveal today.

Data from the National Home Building Council shows the number of houses started in the region has fallen from 3,822 in the third quarter of 2007 to 1,548 in the same period this year – a drop of 60 per cent. In Staffordshire, the number has fallen by 78 per cent from 937 to 203, while in Shropshire it has sunk by 39 per cent from 402 to 247.

Nationally, the number of properties which have been started has fallen to 23,111 compared with 50,150.

This has sparked fears that homebuilding will grind to a virtual standstill across the country in the new year, leading to tens of thousands of job losses in the building trades. The news comes as falling house prices continue to fuel the crisis in the construction industry.

The head of Barclays Bank forecast the economic gloom will deepen, with house prices tumbling as unemployment soars.

John Varley predicts property prices could fall by up to 30 per cent – and that unemployment could hit 7.5 per cent in the next 12 months.

The Tories accused the Government of "failing to be pro-active" over housing and warned that immediate action was needed.

Shadow housing minister Grant Shapps said: "The market is in meltdown. The Government needs to be more pro-active coming forward with plans to kick-start the market."

The Government has committed £8.4 billion over three years towards social housing and has a target of building three million homes by 2020.

Yesterday, Housing Minister Margaret Beckett announced an extra £100 million to help first-time buyers with a household income of under £60,000 get on the property ladder.