THE number of homes being built across Merseyside has plunged by almost 70% in just one year – raising fears of mass job losses in the building trades.

Work started on just 228 new properties in the third quarter of the year, down from 723 starts in the same period of 2007, according to figures released by the Conservatives.

The figures tally with a nationwide red alert that housebuilding is at its lowest level since 1924, a crisis blamed on the recession and falling property prices.

Cheshire appears to be escaping the worst of the crisis. Its figure of 159 new starts in the third quarter was a slight rise on 154 in 2007.

Nevertheless, the statistics are a severe embarrassment to Gordon Brown, who made building 3m new homes by 2020 a central pledge when he entered Number 10 last year.

Although most attention is focused on falling prices, the new homes are badly needed because of an explosion in the number of people on the social housing waiting list.

One-in-ten households needs an affordable home and 5m people are expected to be on the waiting list by 2010 - 1m more than this year.

Now there are fears that home-building will grind to a virtual standstill in the New Year – which would trigger tens of thousands of job losses in construction.

Grant Shapps, the Conservative housing spokesman, blamed the slowdown on the Government's reliance on “central diktats” and on confusion caused by home information packs (HIPs).

He urged ministers to abandon “bureaucratic initiatives” and adopt the Tory suggestion of axing stamp duty for first-time buyers, to kick-start the market.

Mr Shapps said: “The economic downturn has ushered in a collapse in the number of homes being put up – even as demand remains high. It's time the minister followed our lead and worked with, rather than against, local communities to build the homes that our country needs.“

In September, the Government announced a £1bn rescue package to tackle the effects of the credit crunch on the housing market. It included raising the threshold at which 1% stamp duty is paid and fast-tracking £400m for social housing providers to deliver 5,500 homes over the next 18 months.

Although the statistics only cover the three months to the end of September, the financial crisis has worsened since – despite the package.

A report from Construction Products Association (CPA) found there had been just 135,000 housing starts this year – down from 203,500 in 2007 and the lowest peacetime figure since 1924.