60% drop in home building

THE number of new homes being built in London has fallen by 60 per cent over the past year.

Just 1,539 homes were constructed between January and July, compared with 4,359 in the same period a year earlier. The figures come from the National House Building Council, which registers all new housing builds. In April, construction started on 228 new private homes compared with 1,039 in April last year.

Experts say the slump is mainly due to continuing difficulties for first-time buyers trying to secure mortgages. The expectation among buyers that property prices will drop further is adding to the problem. Analysts Capital Economics forecast a fall in prices of 10per cent this year and five per cent next year and in 2011.

The figures cast doubt on Mayor Boris Johnson's promise of 50,000 affordable homes over the next three years.