Guardian UK: 6000+ building firms to fail by mid-2010 as falling house prices exacerbate crisis

[marmar]

Housing starts lowest since 1924 as construction bears brunt of recession
• Target of 3m new homes by 2020 unlikely to be met
• 6,400 building firms to fail by middle of next year

Kathryn Hopkins
The Guardian, Monday 15 December 2008


The number of homes being built in Britain has plummeted to its lowest level since the early 1920s as falling house prices exacerbate the crisis in the construction industry.

A report out today from the Construction Products Association (CPA) and Ernst & Young reveals there have been just 135,000 housing starts this year, compared to 203,500 in 2007. This figure, excluding the second world war when few houses were built, is the lowest since 1924, when there were 87,000 housing starts during a period of severe deflation.

Many projects date from before the worst of the financial crisis hit and there are fears that homebuilding will grind to a virtual standstill in the new year - leading to tens of thousands of job losses in the building trades.

Commercial property is also being hit hard, with the CPA expecting falls in office construction alone of 24% next year and 19% in 2010.

The CPA said this was partly offset by the increase of public sector spending on construction. However, this increase in spending, which the Treasury anticipates will lead to unprecedented government borrowing over the next few years, will not be enough to stop overall construction falling significantly over the next two years. .......(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/dec/15/housing-starts-construction-recession-crisis