Page last updated at 14:33 GMT, Friday, 24 October 2008 15:33 UK

Downturn 'halts house-building'

Map of the Thames Gateway area
The Thames Gateway is the largest project of its kind in northern Europe

House building in the Thames Gateway has virtually ground to a halt because of the economic downturn, BBC South East has learnt.

More than 52,000 new homes should be built in the north Kent part by 2026, according to the government's target.

But the South East England Development Agency (Seeda) has said while ongoing projects would be finished, new housing projects would be put on hold.

It said it hoped the situation would improve in the long term.

Jeff Alexander, of Seeda, said: "On St Mary's Island, for example, we've developed with our private sector partners 1,000 homes, we've got plans for a further 1,000 homes. What we are having to reassess now is the pace that this will go forward.

"It is certainly the case that that will slow down with the current market conditions.

"The plans are there, the land is there, the overall strategy is there but there is going to be some sort of slowdown."

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Builder Lee Sparkes, who is working on the site at Chatham, said he had never known things to be so bad.

"2008 is disgusting compared to the other years," he said. "It really is quite bad, simply because there are no new builds going on.

"We have had sites that are finishing up now and this is the only one we've got going so there is just nothing. We're lucky if we get a full week in."

The Thames Gateway is the largest project of its kind in northern Europe, and stretches from east London into Kent and Essex, with 40 miles of housing and business regeneration.

It has an overall budget of 9bn of public money.

A Communities and Local Government spokesperson said: "We recognise there are challenges caused by the global credit crunch but we must remain ambitious if we are to reinvigorate communities in the Thames Gateway.

"So far over 45,000 new homes have been built in the Gateway and the Thames Gateway Delivery Plan sets out how we are driving forward the delivery of 160,000 new homes by 2016."

'Make a profit'

About 2,000 new homes have been built each year in north Kent since 2001 and that would have had to rise to 2,600 a year to meet government targets.

Chris Crook, of Countryside Properties, the firm behind the St Mary's Island development in Chatham, said: "We've got the other phases of development that have got planning consent and we are hoping to make a start on those next year, but we will have to assess that at the time.

"We run a business, we have to make a profit and if we are not making a profit then we'll think twice about starting the next phase of development."

Karen Stalbow, from housing charity Shelter, said it "paints a worrying picture".

She added: "There is no doubt that the worsening economic climate is having a negative impact on the delivery of new housing developments across the country.

"The government has recently announced a cash boost for affordable house building, but this will only make a difference if key players in the Thames Gateway Project, work with each other to develop innovative solutions for the delivery of housing."

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