Latest forecast predicts just 147,000 housing starts in 2008 and overall construction output to fall 1.3%

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%.

Michael Ankers, CPA

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.