UK construction shrunk at its fastest pace since 2009 after the UK voted to Leave the EU.
The figures offer little comfort to prospective homeowners after a damning report from the Resolution Foundation revealed that home ownership has fallen to its lowest level for 30 years.
The research shows supply has failed to keep pace with demand in the UK, shutting buyers out of the market.
The Markit/Cips data for July showed that the purchasing managers' index, or PMI, for the construction industry fell to 45.9 in July from 46.0 in June.
The index measures new orders, deliveries and employment, among other things, and is considered a key indicator in the confidence of the construction sector.
Survey respondents noted that uncertainty following the EU referendum had dampened client confidence, led to greater risk aversion, and encouraged a wait-and-see approach to decision making.
There were some reports that demand had been more resilient to Brexit than expected. But just 15 per cent of firms reported higher activity in July against 23 per cent that reported a decline.
The figures deal a further blow to a sector that was already in recession in the second quarter and has been greatly underperforming the rest of the economy, Markit said.
UK construction shrunk at its fastest pace since 2009 in July
The sharpest decline came in commerical activity, which fell for a second month running and at the fastest pace since December 2009 as investment in offices, industrial units and retail space slumped.
Housebuilding also fell sharply, down for a second straight month but at a slightly slower pace than in June.
The average drop in housebuilding over the last two months has been the most severe for seven years.
Employment in the construction sector fell for the first time since May 2013, with voluntary leaves not being replaced and a sharp decline in sub-contractor availability.
Tim Moore, senior economist at Markit, said: “July’s survey is the first construction PMI compiled entirely after the EU referendum result and the figures confirm a clear loss of momentum since the second quarter of 2016, led by a steep and accelerated decline in commercial building."
David Noble, group CEO at the Chartered Institute of Procurement & Supply, described the construction sector's downhill course as "a seriously disappointing development".
"The picture is still unclear around whether this direction is fixed for the coming months or is a short-term reaction and the aftershock of the UK’s referendum decision," he said.
Home ownership has fallen 7 per cent in England from a peak of 70.8 per cent in April 2003 to 63.8 per cent in February 2016.
Across the UK, home ownership has dropped 6.8 per cent from peak of 70.9 per cent in 2004.
The data shows that the housing crisis has spread beyond London, with regions in the North and the Midlands becoming increasingly unaffordable.
