A total of 33,400 new properties were started during the three months to the end of June, two per cent more than during the previous quarter, but 19 per cent down on the same period of 2007, according to Communities and Local Government.

The drop in the number of properties being built by private sector developers was even more severe, with these sliding by 27 per cent year-on-year.

But the number of homes being built by registered social landlords has soared by 56 per cent compared with the same three months of 2007, to stand at its highest quarterly level for 11 years.

On an annual basis the number of new homes being started by all builders continued to decline, dropping to 147,500 during the year to the end of June, 12 per cent less than during the previous 12 months and 20 per cent below the peak reached in 2005/2006.

Housebuilders have been hit hard by the problems caused by the credit crunch, with the mortgage famine affecting sales as potential buyers struggle to raise the finance they need to buy a home.

The problems have been particularly acute for first-time buyers, with lenders demanding increasingly high deposits, forcing many people to put plans to get on to the property ladder on hold.

Falling house prices have also led to many housebuilders delaying starting new projects, with the sector shedding about 5,000 jobs.

Housebuilders' share prices have plummeted amid concerns that the firms could breach their banking covenants, while they have also been forced to writedown the value of their land banks.

The CLG figures also showed that there was a nine per cent fall in the number of new homes completed during the second quarter, compared with the first three months of the year, at 36,600 - the lowest figure since the first quarter of 2004.

Completions during the three months were also 13 per cent below figures for the same period of 2007, with completions exceeding starts for the third quarter in a row.
About 161,100 homes were finished in England during the year to the end of June, four per cent lower than during the previous 12 months.

On a regional basis the number of new homes started during the second quarter were lower than a year earlier in all areas of the England except London, with particularly large falls seen in Yorkshire and Humberside, the North West, South East and East.

Falling housebuilding levels are putting under threat the Government's target to have 240,000 new homes built each year by 2016.