The public purse is now funding almost half of new home building, demonstrating the extent to which the government is shoring up the construction industry amid a historic slump in private sector development.

The public and private sectors are providing almost equal numbers of new houses, with the public sector responsible for about 45% of home starts over the three months to the end of February.

This compares with just a fifth of new homes that were funded by the public sector in the last few months of 2007 as the housing boom entered its final phase. The research, based on data from the National House Building Council, shows the number of houses being registered by the private sector – indicating that building is under way – dropped by about three-quarters during 2008, while public sector home registrations have stayed broadly consistent.

Financial Times