The figures from the Communities and Local Government department found a total of 33,400 new properties were started during the three months to the end of June, 2% more than during the previous quarter, but 19% down on the same period last year. .

It also found that there was a 9% fall in the number of new homes completed during the second quarter, compared with the first three months of the year, at 36,600 - the lowest figure since the first quarter of 2004.

The fall in the number of properties being built by private sector developers was even more severe- falling by 27% year-on-year.

However the number of homes being built by registered social landlords has increased by 56% compared with the same three months of 2007, to stand at its highest quarterly level for 11 years.

On an annual basis the number of new homes being started by all builders continued to decline, dropping to 147,500 during the year to the end of June, 12% less than during the previous 12 months and 20% below the peak reached in 2005/2006.

Housebuilders have been hit hard by the credit crunch, as potential buyers struggle to raise the finance they need to buy a home.

Falling housebuilding levels are threatening the Government's target to have 240,000 new homes built each year by 2016.

Falling house prices have also led to many housebuilders delaying starting new projects, with the sector cutting around 5,000 jobs.