The credit crunch has reduced new home-building to less than half last year’s level and frozen work on commercial developments, say construction industry chiefs.

Just over 75,000 new homes will be completed this year, compared with 160,000 last year and the government’s target of 240,000 homes each year until 2016, according to Keith Miller, chief executive of Miller Group, Britain’s biggest privately owned housebuilding and construction group. Next year’s total will be even lower, he forecast.