Statistics from National House Building Council (NHBC) reveal that the number of applications from builders to start new homes fell by more than a quarter year-on-year during the three-month period from February to April 2008, as the effect of the credit crunch forces more builders to slow down activity on site.

NHBC statistics show that there were 37,762 applications to start new homes in the UK in the three months from February to April 2008 - a 27% decrease on the same three month period a year ago (51,465). Of that total, 28,492 related to private sector activity, showing a 32% decrease on the same three month period in 2007 (41,736).

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Housing association figures fell less sharply in the three months to the end of April, with applications totalling 9,270, a decrease of five per cent on the same period a year ago (9,729).

Imtiaz Farookhi, NHBC Chief Executive, said: "The drop in housing starts continues to reflect the difficult market conditions being experienced by house builders. Activity by private house builders was particularly low in April this year.

"Our latest figures show that in April this year 8,443 new homes were started for private sale, the lowest number of starts in this sector, apart from December when activity is traditionally low, since our accessible monthly records began in 1986."

(CD/JM)