In total, 122,590 homes were started, up 23% on the previous year. But the number of homes completed fell 5% to 109,370, the lowest level since 2010.

Progress was replicated in every area of the housing market. Compared to 2012 starts by private builders were up 24%, while starts by housing associations increased by 24%.

But the latest seasonally adjusted quarterly figures for October to December showed both starts and completions showing signs of tailing off, both down 1% compared with the preceding quarter

These latest quarterly starts figures reached 32,320 – a level now running 89% above the trough in the March quarter of 2009, but down a third compared to peak house building back in the March quarter 2007.

Communities secretary Eric Pickles, said: “Last year we built the most homes since 2007, and even the appalling weather conditions this winter have not stopped our hardy builders from getting the job done.

“That means an increase in small firms benefiting from the surge in construction orders, and more business confidence in the economy.

“But there’s still more to do, and improving the housing market will remain a vital part of our long-term economic plan.”

The number of homes being built in the UK is still well below its all-time high, which was 425,000 in 1968.