The Treasury's Asset-backed Guarantee Scheme, one of the key policy measures enacted by the Government to get the housing market moving again, 'seems not to be working', according to MPs. The guarantees were made available in April, but none of the major banks has issued a security with such a guarantee.

The Communities and Local Government Select Committee says in a report today that the scheme, designed to bring fresh funding to the mortgage market, is 'a leap that reaches across only half the chasm: impressive, but doomed to fail. If we are to meet housebuilding targets, then ministers and senior officials must maintain pressure on the Treasury to bring forward new measures to get the mortgage markets moving.'

Phyllis Starkey, Labour chair of the committee, commented: 'House-builders simply will not build homes which they cannot sell.'

The Independent