UK house-building at lowest level since 1923

The number of new homes completed in England last year fell to its lowest level since 1923, Government figures showed today.

Just 102,570 properties were built in 2010, 13% less than in the previous 12 months, and the lowest level during peacetime since 1923, according to Communities and Local Government.

There were double digit falls in the number of homes both started and finished during the final quarter of the year, as the construction industry was hit by bad weather.

Only 23,000 homes were started in the three months to the end of December, 11% fewer than during the previous quarter, while the number completed fell by 13% to 23,190.

Within the total, the fall in completions was greatest among private developers, with the number of properties they finished diving by 18%, compared with a 3% rise for housing associations.

The annual level of completions is well below the 232,000 properties it is estimated need to be built in England each year to keep pace with rising demand.

Stewart Baseley, executive chairman of the Home Builders Federation, said: "Today's figures reveal the extent of the housing crisis and we need real action now to prevent the crisis deepening.

"The problem is that we have a planning system in the midst of radical change, expensive and unnecessary red tape and a shortage of mortgage availability.

"If we are going to weather this perfect storm, tackle the housing shortage and produce growth across the country we need early action to resolve and simplify planning, reduce regulation and encourage lenders to lend again."

The figures came as the Government announced the first £200 million of a new scheme to encourage local communities to build more homes has been allocated to councils.

It has set aside nearly £1 billion to kick-start its New Homes Bonus initiative, which will see local authorities given extra cash for every new home built in their area.

Under the scheme, the Government will match the council tax raised through new homes for the first six years, with councils receiving up to 36% more for affordable homes. Money will also be paid for empty homes brought back into use.

As a result, councils will get an average of more than £9,000 for every band D home built, or nearly £11,000 for an affordable property, during the six years.

The Government estimates that a community that builds an additional 1,000 properties could earn up to £10 million.

The money will be paid to councils, who will be encouraged to consult their local community on how it is spent.

Possible uses for the cash range from council tax discounts for local residents, to boosting frontline services, such as rubbish collections, to providing facilities, such as swimming pools and leisure centres.

The Government estimates the scheme will lead to an additional 140,000 new homes being built in the coming 10 years.

Housing minister Grant Shapps said: "Telling communities what homes they need and where they should be built has had catastrophic consequences.

"To kickstart a housebuilding revolution, development needs to be backed by local communities rather than opposed by them."

Around 326 local authorities will share the first £200 million, with Tower Hamlets getting the most at £4.3 million, followed by Islington at £3.7 million and Birmingham at £3.2 million.

Other councils making the top 10 that will receive the most from the first payout include Manchester, Leeds, Bristol, Bradford and Milton Keynes.

Campbell Robb, chief executive of housing charity Shelter, said: "In this country we have 1.8 million households on waiting lists, more and more families stuck in an insecure private rented sector, and millions priced out of the housing market, and a lack of affordable housing is the root cause.

"It is absolutely essential that local authorities start prioritising spending on housing delivery to meet need and ensure clear transparency for local people to rate their performance and hold councils to account. Building more homes is the only way to tackle our escalating housing crisis."

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: "With housing supply still struggling to reach pre-recession levels, RICS welcomes the focus the Government is placing on this issue.

"However, the impact of the New Homes Bonus is likely to be limited and other measures are urgently needed to boost housebuilding.

"The Government's own impact assessment suggests that the New Homes Bonus is only likely to deliver an additional 14,000 homes each year for the next 10 years.

"This represents a drop in the ocean when the population is growing by roughly 220,000 households per year and the latest figures show there were only 102,000 housing starts in the whole of 2010."

Campbell Robb, chief executive of housing charity Shelter, said: "In this country we have 1.8 million households on waiting lists, more and more families stuck in an insecure private rented sector, and millions priced out of the housing market, and a lack of affordable housing is the root cause.

"It is absolutely essential that local authorities start prioritising spending on housing delivery to meet need and ensure clear transparency for local people to rate their performance and hold councils to account. Building more homes is the only way to tackle our escalating housing crisis."

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: "With housing supply still struggling to reach pre-recession levels, RICS welcomes the focus the Government is placing on this issue.

"However, the impact of the New Homes Bonus is likely to be limited and other measures are urgently needed to boost housebuilding.

"The Government's own impact assessment suggests that the New Homes Bonus is only likely to deliver an additional 14,000 homes each year for the next 10 years.

"This represents a drop in the ocean when the population is growing by roughly 220,000 households per year and the latest figures show there were only 102,000 housing starts in the whole of 2010."