Though starts were up, the number of completions fell, with the figure for the last quarter of 2013 down 41% on pre-financial crisis levels. Photograph: Getty Images
The number of new homes started in England rose by almost a quarter in 2013, but experts said the pace of construction remains well below that needed to tackle the country's housing crisis.
The Department for Communities and Local Government said construction was started on 122,590 new homes during 2013, a 23% increase on the previous year.
The number of completions, however, fell by 5% to 109,370.
The 2013 figure represents less than half of the estimated 250,000 new homes a year needed to meet the demand for housing in England, and is still below the peak reached before the 2008 financial crisis.
At 28,510, the number of homes completed in the last quarter of 2013 was 41% lower than in the first quarter of 2007.
Housing developers have been buoyed by the first part of the government's Help to Buy scheme, which offers buyers an interest-free loan of up to 20% of the purchase price of a new-build property, but the figures showed starts by private builders dropped by 1% in the last quarter of 2013. Housing association starts were up by 3%.
An estimated 32,320 homes were started during the quarter, 1% fewer than in the previous three months.
The communities secretary, Eric Pickles, said the figures showed that Britain was building again.
"This government is fixing the broken housing market we inherited in 2010," he 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."
Economists and housing groups, however, said that building was still below the level needed to meet demand and keep the lid on prices.
The housing charity Shelter said there was a "woeful gap" between the number of homes available and the number needed, which "spells disaster for future generations".
The Chartered Institute of Housing's chief executive, Grainia Long, said: "These figures are further confirmation that we are nowhere near tackling our national housing crisis, which means that millions of people are being denied access to a decent home at a price they can afford."
Matthew Pointon, a property economist at Capital Economics, said that despite the increase in building in 2013, it was likely to be the end of the decade before figures returned to pre-crisis levels.
"We have doubts that such a breakneck pace in starts can be maintained. After all, the current pace of growth has meant that builders have already found themselves coming up against shortages of materials and labour," he said.
"There are other, longer-term factors that will prevent a rapid return to pre-crisis levels of building. If demand is overly dependent on the Help to Buy scheme, builders will be understandably nervous about ramping up production when it is due to end in early 2016 – which is also likely to coincide with rising interest rates.
"Coupled with the long-standing issues of land availability and planning delays, we expect it won't be until around 2019 that the level of housebuilding returns to pre-crisis levels."
The figures came as the Council of Mortgage Lenders reported a drop in gross lending in January, in keeping with the traditionally quiet start to the year in the property market.
It said its members had advanced about £15.5bn over the month, an 8% drop on December's figure. The figure was up by a third on the previous year, however, and the organisation said housing market indicators in the UK continued to be positive.
An average of 70,000 mortgages a month were approved for house purchases in the final three months of 2013, and price data from lenders suggests that January was a strong month for the market.
The Bank of England has suggested that approvals may climb to 90,000 a month in the second and third quarters of 2014.
The CML's chief economist, Bob Pannell, said he was sceptical about the Bank's prediction.
"This would seem to imply property transactions running at an annualised rate of 1.5m or so. We think this may be over-optimistic given the growing anecdotal reports of a shortage of prospective sellers," he said.
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