Starts on site increase 2% in the first quarter, as social build outstrips private starts in March

The number of homes started on site has risen quarter-on-quarter for the first time in nearly two years.

The data, compiled by the National House Building Council (NHBC), shows that 16,232 applications to start homes were received during the first three months of 2009, 2% higher than the final quarter of 2008.

The figures also show that 3,011 social homes were started in March compared with 2,943 private. This is the first time social has outstripped private since 1986.

Imtiaz Farookhi, the NHBC’s chief executive, warned that the rise may be explained by “seasonal trends”, but welcomed the increase in activity after seven quarters of decline.

He said: “It holds out the hope, backed up by anecdotal evidence from builders, that the market has stabilised, albeit at perilously low levels.

“The next couple of quarters will be key in determining whether or not this stabilisation will lead to a partial recovery in volumes, even in the depths of the worst recession since the war.”

Alan Cherry, chairman of Countryside Properties, pointed out that the increase in starts was from a “low, low” point.

He added that the rise mirrored an increase in the willingness of banks and building societies to lend money.

He said: “There are signs that signs that one or two banks are advertising for home loans. RBS and HSBC have been advertising in the past few days, and that’s welcome news.”

Despite the quarter-on-quarter rise, starts in the private sector were still 70% down on the same quarter last year; the public starts were 12% less.

Completions are still falling, with 25,777 homes built in the first quarter of this year compared with 36,186 in the last quarter of 2008.