Private enterprise housing starts were also 8% lower in the first quarter than the final quarter of 2011 while starts by housing associations were 21% lower.
House building completions however increased up 6% to 31,010 in the first quarter from the previous and completions by private enterprise and housing associations increased by 8%.
Annual housing starts totalled 104,970 in the 12 months to March 2012 down by 6% compared with the 12 months to March 2011.
Annual housing completions in England reached 117,870 in the 12 months to March 2012 an increase of 6% compared with the 12 months to March 2011.
Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors, said: “The data clearly demonstrates that housing delivery is at the current time, falling well short of expectations.
“The number of starts in the first three months of the year was not only sharply down on the final quarter of 2011 but actually the most disappointing number since the Autumn of 2010.
“Significantly, the drop in development activity was visible not just in housing associations and local authorities but also in the private sector.”
Rubinsohn however added that there were good reasons for expecting government policy to gradually have an impact on the level of starts.
He said: “The NewBuy mortgage indemnity scheme only started a couple of months back and is taking a while to gain traction. More important for the medium term could prove to be the planning changes that have been pushed through by the government.
“But even if the measures do begin to pay dividends, it is hard to see to the increase coming anywhere near the level of new housing required.
“Indeed a key factor continuing to hold back development at the current time and probably for the foreseeable future is the lack access to development finance.”
The most recent RICS construction survey revealed that close to two thirds of surveyors had seen no evidence that finance was becoming more readily available. Only 15% had seen an improvement.
