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Housebuilding projects rise 26%

The number of new properties under construction rose by 26 per cent during the first quarter, figures have shown.

Official data reveals that the housebuilding industry is showing signs of recovery, with 29,140 homes starting on site during the three months to the end of March.

This was 26 per cent more than during the previous quarter and the highest level since the second quarter of 2008, according to the Department for Communities and Local Government.

The figure was also 88 per cent higher than the low reached at the beginning of 2009.

It follows two consecutive quarters during which housebuilding numbers had fallen.

Within the total, housebuilding by private developers was up by 24 per cent, while starts by housing associations jumped by 37 per cent.

But commentators warned that although the increase in new-build numbers was good news, it was likely to reflect the fact that starts had been impacted during the previous quarter by the bad weather.

Although the number of new homes started in the 12 months to March rose by 22 per cent to 106,590, this was also still around half the level that is needed to meet growing demand.

The housebuilding industry was hit hard by the credit crunch as developers struggled to raise the finance they needed, while consumers could not get mortgages to buy new homes.

The problems led to many sites being mothballed, while other planned developments were never started.

The Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn said: “Data released this morning shows a welcome rebound in housing starts in the first quarter of the year, but this increase largely reflects a recovery from the weather-induced weak reading for the final three months of last year.

“Even allowing for this improvement, the underlying picture still remains a cause for some concern. The trend rate in delivery for housing starts is currently running at little more than 100,000 per annum, against estimates of new household formation running at more than double this figure.”