A slowing housing market that is hitting the UK construction industry will make it even harder for the Government to reach its housing targets, says the RICS.

In its UK Construction Market Survey published today, the body representing chartered surveyors, said that the growth in construction workloads had fallen to its lowest level for more than a decade as house builders and businesses were hit by the effects of the credit crunch and demand for housing fell away.

It said the worst hit sector was private housing with workload growth in this sector turning negative for the first time since 1999. The fall was due mainly to a downturn in the North, although private housing weakened in all regions and was static in other areas including London and the South East, Wales, the Midlands and Northern Ireland. Expectations for profits margins have also fallen.

RICS senior economist David Stubbs said: ‘Growth in the construction industry has slowed abruptly in the first quarter of this year. Private residential workloads are now shrinking as home builders react to challenging conditions in the housing market by reducing the number of new homes under construction. This emphasizes the difficulty that the Government will have in encouraging higher house building levels during periods when the housing market is softening.'

He said as the slowdown continues it will force developers to shelve plans for future construction.