The number of homes being built has fallen to the lowest level since records began in 1980, according to data published on Thursday, threatening to undermine government plans to build 2m new homes by 2016.

Seasonally adjusted housing starts fell to 16,300 in the three months to December 2008, 27 per cent fewer than the previous quarter, and 58 per cent below the year before, according to the Department for Communities and Local Government.