Much Christmas chat touched on what the effect of the credit situation would be on the UK construction industry. Today, news comes from Persimmon Homes that their sales fell since August, and they blame it on the credit crunch.

On the one hand, we have a much-vaunted 'housing crisis' which is blamed on high prices and low supply; hence a raft of growth areas where ambitious targets for new housebuilding are set. On the other hand, these targets will not be met by the private sector if buyers can't obtain mortgages and there is a squeeze on credit that affects the financing of speculative development. At the same time, construction costs are rising as a result of the Code for Sustainable Homes, for example.

Projects may well go on hold in areas which have low consumer confidence - parts of the Thames Gateway, for instance - fuelling calls to aid housebuilding further by relaxing regulation and planning restrictions, or to invest further funds into development areas via English Partnerships and other agencies. It's notable that Persimmon's lower-priced social housing arm, Westbury, continued to see growth on the back of government support; more of this 'support' will undoubtedly be needed if Gordon Brown is to fulfill his pledge to put housing at the top of his agenda, and the increased targets that he promised to fulfill.