House building expected to halve in key areas

House building looks set to halve for each of the coming two years in some of England's most vulnerable urban areas, despite government plans to pump billions of pounds into them.

The Financial Times reported that England's 11 Pathfinder schemes, in areas of the North and Midlands, will see drastically reduced levels of house building, even though the government committed £2.2bn to the areas between 2002 and 2011.

The slump in delivery is being blamed on falling property prices and declining mortgage availability.

Before the downturn, Pathfinders had expected development to rise to 100,000 homes a year by 2009-10 and would draw £4 in private investment for every £1 from the public public, the paper said.

Keepmoat, the biggest Pathfinder builder, will build only 600 of its projected 1,200 homes in 2009-10.