Housing projects have taken a significant dip in value, dropping 44 percent in the last 3 months. A lack of finance from banks has been the leading factor for the fall, according to the Scottish industry. New housing projects of 1,950 started between May and July; the value being 1.4 billion pounds. This is compared with almost 2,500 new projects valued at 2.5 billion pounds in the 3 months prior to now.

The publisher of the figures, James Abraham, economist at Glenigan, said the dips pointed out how fragile the recovery is in the housing sector. This drop, strangely enough, comes on the heels of positive news last week from the Office for National Statistics. The second quarter construction sector output grew by 9 per cent.

Abraham outlined the cause of the reported figures saying: "The weakening in new project starts over the past three months points to an easing in construction output growth during the second half of this year.

Michael Levack, chief executive of the Scottish Building Federation, said the Glenigan report confirmed news heard from his members.

He described the situation by saying: "Private sector house building continues to struggle, with the limited availability of finance hampering recovery."

The social housing sector is believed to not recover for the next two years, as new project are off more than 40 per cent during the second quarter compared with last year.

Levack commented on the sector as a whole saying: "Faced with a sustained period of cuts to capital spending, all levels of government need to address the ongoing plight of the construction sector."