According to official data from the Office for National Statistics (ONS) this fell 4.9% in the three months to June to £3.63bn.
The latest ONS data for July also showed new private housing construction output fell by £95m (3.9%) compared to June.
The drop followed several months of good growth with the July total being up 3.4% on last year, and the three months to July up 1.2% on the preceding three months.
However, the drop was expected by some as a concerning move toward a slowing house building sector.
Murray Smith, managing director of SiteSales Property Group, warned that the autumn would be key as pre-Brexit project completion was expected to be strong, but the post-vote hiatus and uncertain market had withheld starts in recent quarters.
All new construction work has fallen markedly in Q2 2017, dropping to its lowest level since Q1 2014; at £11.78bn.
The ONS noted: “Following strong growth in June 2017, private housing fell by £95m, representing the main downward pressure on construction output.”
ONS senior statistician Kate Davies added: “Construction output fell for the fourth month in a row, with private housing-building contracting in July after a strong couple of months.”