The underlying value of private housing construction projects starting on site fell in the three months to July, after six months of sustained growth according to the latest data from industry analysts Glenigan.

Approximately 1950 projects worth £1.4bn started on site from May to July, compared to 2450 projects worth £2.5bn in the previous three months.

James Abraham, Glenigan’s economist, said: "Private housing had previously been a source of some optimism, as returning private sector confidence encouraged developers to invest in new work. The dip in the last three months highlights the fragility of the recovery."

”The weakening in new project starts over the last three months points to an easing in construction output growth during the second half of this year. While the decline in starts is not expected to continue to the end of 2010, the slowdown has diminished overall construction prospects,"

Commenting on social housing construction activity Abraham said: "New social housing projects have fallen sharply, with the three months to July over 40% down on a year ago according to Glenigan data. The shrinking pool of new work comes as the increase in government funds during the last financial year dry up. A recovery is not expected for the sector within the next two years."

This has left the Glenigan Residential Index for July, which tracks projects between the value of £250,000 and £100m, 22% down on a year ago. Whilst social housing starts are likely to remain under pressure over the coming months, a mild recovery in private housing starts is anticipated at the end of the year as house builders are expected to capitalise on gradually improving market conditions.