Construction Products Association forecasts 27% drop in housing starts

Housing starts have fallen to their lowest level since 1945, according to figures from the Construction Products Association.

Its latest forecast predicts there will be 147,000 new starts this year, a fall of 27% on 2007.

Private sector starts are down by 30%, the lowest level since 1992, while the CPA said the social housing programme is failing to grow in line with the government’s plans for 45,000 new homes a year by 2011.

Its previous forecast that the wider construction industry would grow in 2008 has now been reversed and output is expected to fall by 1.3%.

CPA chief executive Michael Ankers said: “The impact on the new build housing market has been more severe than any of us anticipated.”

He added: “2008 seems likely to see the sharpest fall in construction output since 1993 with the situation deteriorating further still in 2009 before a modest recovery in the following year.”

In response the CPA has called on the government to help first-time buyers get mortgages and investigate ways in which interest rate cuts can feed through to mortgage payers.