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The House Builders Association has said that less than half of the houses promised to be built by prime minister Gordon Brown will be completed by the end of the year.

The former chancellor of the exchequer said 240,000 houses would be built by the end of 2008, however the housing body says that only 110,000 homes are likely to be complete by that time.

Roger Humber, a spokesman for the House Builders Association, said such difficult conditions for the housing industry had not been seen since the difficult economic conditions of 1931.

He added that companies would be looking to cut costs rather than develop new sites resulting in fewer new homes being set up.

Mr Humber said: "We've not seen anything like this post-war. It's essentially a financial crisis, more like 1931 than anything else that we've seen.

"House builders are not going to be starting new sites, they're going to be laying people off, they may even be mothballing sites. It really is on a scale we've not seen before."

Housing Minister Caroline Flint told the BBC that the government would continue to follow forecasts and keep aware of market possibilities.

Ms Flint said: "I don't underestimate the challenge that house builders are facing and clearly the number of homes being built this year has gone down.

"We're watching closely to see and listen to different forecasts about what might happen in the next 12 months," she added.