Speaking of the mortgage lending figures before the Budget announcement yesterday, CML director general Michael Coogan said: “While the market is beginning to show some signs of stabilising, housing transactions and lending are set to remain low for the foreseeable future.

“Today’s Budget does provide the opportunity for action to reinforce the housing market.”

Since then, Chancellor Alistair Darling announced in the Budget yesterday that the problems in the mortgage market would be addressed through a scheme to guarantee mortgage-backed securities, the extension of the £175,000 stamp duty starting threshold, and the extension of mortgage rescue measures for people struggling to make repayments.

Commenting on the announcements, Mr Coogan said: “The most important element of this Budget for the mortgage market over the long term may prove to be the new asset backed securities guarantee scheme. This potentially offers an opportunity to restart the capital market funding for mortgages that will be a crucial factor in delivering an adequate supply of mortgage credit.”

However, he added that the measures are unlikely to have a significant impact: “The Chancellor had little room to make substantive interventions, so there are no real surprises in this list. The measures overall are unlikely to significantly improve prospects for higher market activity in the coming months,” he said.

And as first time buyers continue to struggle in the mortgage market; many experts see the extension of the stamp duty threshold as insufficient. Peter Bolton King, chief executive of the National Association of Estate Agents said:

“Merely extending the stamp duty threshold is disappointing. Mr Darling had a real opportunity to get rid of this hated tax, which is seen by many as a tax on aspiration. Since the threshold was introduced last Autumn it has helped just one third of first time buyers.

“In this difficult economic time, Mr Darling could have seized the opportunity to encourage first time buyers to the market and to send a signal of confidence that may have reverberated around the economy.

“Instead he has tried to choose a path to please everyone, which I suspect will please no one,” he added.

© Fair Investment Company Ltd