There is no way that you can look at the latest set of house building figures for England in the third quarter of this year and suggest they look good.

Yes it is true that private sector housing completions were up for the second consecutive quarter as the press release points out, but they were lower by 4% than in the same quarter a year ago.

Furthermore, the completions we see in the third quarter represent a view taken by house builders some months before when there was growing optimism. They do not reflect current sentiment.

In terms of the total number of  homes built there was a slight fall quarter on quarter on a seasonally adjusted basis and a significant fall on a non-adjusted basis.

Much of this was a result of the continued collapse in social homes completed. The level of social housing completions is now at its lowest level since the beginning of 2006.

Overall these figures certainly aren’t consistent with a recovery in the sector. But it is in line with the view that house builders have set themselves up to build to more closely match demand and that demand is flagging, as we have been told time and again in recent reports from the major housebuilders to the City.

What’s more private housing starts dipped sharply this quarter. In fairness this may be in part due to the blip in the previous quarter. But again this is not comforting news.

Looking at the numbers we have for the first three quarters, it seems that completions in England are about 12% down on the same period a year ago. And while it is probable that more than 100,000 homes will be built in England this year, that number will only narrowly be topped.

The real question is whether given the current uncertainties in the market we should expect to see a further drop in house building in 2011. That cannot be ruled out as house builders will be loathed to build into a market where sales are dwindling.

Anyway, in search of a positive spin, I have just checked the twitter page of the ever-upbeat Grant Shapps to see if he has managed to find one. Not when I looked. I might check later.

Mind you his attention has been drawn to fending off claims that he is chasing poor pensioners out of their homes with changes to the housing benefit arrangements – for a few interesting insights on the subject of housing benefits I do highly recommend a read of recent blogs by Jules Birch. His disection of the muddy “facts” that are being bandied about make for very interesting reading.

You may think that housing benefit is a mile away from house building. It isn’t. The current attempt to squeeze private landlords – albeit those who rent homes to those on housing benefit – may well persuade some of the already much reduced band of investment buyers to hold fire on investing and wait for the uncertainties caused by this spat to clear.

And it also raises fundamental questions over how much social housing should be built.

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