The Government's response to the mortgage lending crisis has been confused and ineffective critics warn, with calls for new solutions gathering pace as repossessions rise and mortgage lending figures continue to plummet.

The Council of Mortgage Lenders estimates that there was £258bn worth of gross mortgage lending in 2008, down dramatically from £363bn last year.

In his pre-Budget report last month Chancellor Alistair Darling announced that mortgage lenders will now have to wait three months before beginning repossession proceedings against borrowers, and RBS said this week that it would not begin the process for six months.

But speaking to the CML Annual Conference yesterday, Liberal Democrat Treasury spokesman, Vince Cable, said: 'The existing proposals on repossessions are woefully inadequate; the Government's mortgage rescue plans cover only 6,000 households, according to the CML, despite the fact that 170,000 households are estimated to have been in arrears for more than three months.'

The Independent