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UK developers cut back massively on new properties in 2009/2010

The number of new homes built in England could slump to its lowest level since 1921 as house builders cut back on building projects and this casts doubt over the government's target of building three million new homes by 2020, according to forecasts from the National Housing Federation.

It will also mean longer delays for the 5 million or more people on waiting lists for affordable housing.

The NHF warns that the number of new properties built in 2009/2010 could fall by 50% to just 70,000.

According to the federation's latest forecast, housing associations are expected to prop up the ailing house building industry in 2009/10 by building up to 45,000 desperately needed new homes for rent, or low cost home ownership. The Federation says this strengthens the case for more government action.

It believes that the government should fund the building of 100,000 affordable homes over the next two years, at a cost of around £6.3 billion which would also have the advantage of saving thousands of jobs and provide a massive shot in the arm to the economy.

Not-for-profit housing associations say they remain optimistic that they will be able to build through the downturn by making use of government grants and investing their own finances to fund developments.

Recent figures from one of the UK's biggest house builders show how dire the situation is. Bovis said it had built only 1,782 new homes in 2008, down from its original target of 3,500 and down 39% on the year earlier. It said the weak market means it will focus on selling homes it has already built rather than building new ones.

And it is not alone, with many other house builders having shelved projects in the current year.