The 4% fall in house building to 98,240 in 2011 is a major setback for housing minister Grant Shapps who pledged to reinvigorate the housing sector after laying the blame on Labour for low building levels.

Prospects for a dramatic upshift this year are not good as housing completions in 2011 were only marginally up, and hardly enough to tempt the big house builders into a long-awaited spurt in starts.

Overall completions edged up 6% to 109,020 in 2011, but those delivered by private house builders were only up 1.5% at 82,170.

The figures are a bitter disappointment to building trade contractors who are counting on the Government’s promise to push starts to around 230,000 a year.

The long term fortunes of the house building industry now rests on whether the Government’s housing strategy can deliver significant growth in supply and demand this year.

Housing commentator Brian Green said: “The latest figures point to a pretty stagnant house building market while there has been some growth in private sector completions, the figures for private starts suggest this growth will be limited.

“It all points to gentle growth in house building but at a level vastly below that which most people believe is needed.

He warned: “As they stand these are very disappointing figures for the Government which claimed it would bring house building back to pre-recession levels.”

“They will now be hoping that the various measures in the housing strategy launched last year will revitalise house building.”

“But the fact remains that most experts believe that while the strategy may encourage more building, the measures will not see house building return to 175,550 peak level of completions by 2015.”