Only 40 newhomes are due to be built in Brighton and Hove this year.

The figure, forecasted by Brighton and Hove City Council, highlights the deterioration in construction since the beginning of the credit crunch as banks shy away from financing large developments.

It has also led to calls for the local authority to be more positive about new housing schemes.

Recently several large developments were voted downby its planning committee, including a plan to build several flats and a doctor’s surgery on the former Gala Bingo site in Hove and thousands of homes at Brighton Marina.

Even if these schemes had been passed, it is doubtful they would be started in the current economic climate.

According to the latest Genigan Index, which tracks the UK housing industry, the value of work started on private residential projects fell by £1 billion to £1.4 billion in the three months to the end of July, compared with the three months before.

Phil Graves, president of the Brighton and Hove Estate Agents Association, described the lack of housing as a “major issue”.

He said: “For Brighton to survive properly and continue being such a popular place to live then it desperately needs to build as many houses as possible in the most appropriate places.

“In the short term the big difficulty is that there is no development finance. The Government has to start putting pressure on banks and other lenders to start lending money to the sector.”

Negative While lack of finance is a UKwide problem, there has been criticism that Brighton and Hove city councillors are too negative towards development.

Affinity Housing, the city’s second largest landlord behind the council itself, is preparing for next month’s appeal against the refusal of its plans for the Gala Bingo site.

A spokeswoman said: “Affinity Sutton would like to develop much-needed new homes in Brighton and Hove but it continues to prove too difficult to secure the necessary planning consents.”

Other problems facing housebuilders include the Government’s decision to scrap central housing targets and make “garden grabbing”

more difficult.

Despite this, a spokesman for the city council said the authority was confident thousands of homes will be built in the near future.

He said: “While we were only forecasting 40 for this year, it could be hundreds more because many homes we were expecting to be completed last year were apparently not. 580 were expected to complete last year and only 160 newhomes ended up registered for council tax.

“Predicting building completions or general levels of house building is as hard as predicting the course of the recession. But the long-termtarget remains. Over the 15 years to 2025 this specifies 8,505 new homes.

“The council has just approved 130 homes at the former General Hospital site and the former Caffyn’s Garage in Hove. So we’re very willing to approve the right developments on the right sites.”