Government accidentally reveals housebuilding is 'stalling'

Fears the housing industry is stalling and home prices are plummeting have been confirmed by the government – accidentally.

Housing minister Caroline Flint unintentionally exposed her briefing notes to photographers as she entered Number 10 Downing Street for a weekly Cabinet session.

The notes warn that housebuilding is “stalling” and house prices will fall by 5% to 10% this year “at best” due to the credit crunch.

In the notes, seen by the BBC, Ms Flint raises concerns the government might not meet its target to build three million new homes by 2020.

“House building is stalling,” it says.

“New starts are already down 10% compared to a year ago. Housebuilders are predicting further falls.

“Having seen net additions reach roughly 200,000 in each of the last two years, the figure for 2008-09 is almost certain to be well down on that.”

Ms Flint does note that demand for housing is high, although many people are having trouble buying.

The notes say: "We can't know how bad it will get. But we need to plan now to put in place effective measures against the risk that it does get worse and to prepare for the up-turn".

Speaking to CJ before the notes were revealed, Brian Berry, director of external affairs at the Federation of Master Builders, warned that housebuilders had already missed annual targets.

He said: “Last year 160,000 new homes were built when the target was 240,000 and this year will be a lot worse.”