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Last week, the government announced its £1bn plans to reinvigorate the housing market and provide further support for struggling homeowners and those attempting to get a foot on the property ladder.

The measures included a year exemption from stamp duty for properties worth less than £175,000, assisting 10,000 first-time-buyers onto the property ladder through a new £300m shared equity scheme and reducing the time frame for accessing income support for mortgage interest from 39 to 13 weeks.

Hazel Blears, communities secretary, said: "This government is committed to practical action to help those most affected by the current state of the housing market. We are working to make sure everyone struggling to pay the mortgage gets support and advice."

While the Council of Mortgage Lenders welcomed the the government action it stressed the importance of further measures to tackle the mortgage funding markets.

Michael Coogan, director general of the CML, said: "Essentially this package is directed at the blockages in the housing market for some vulnerable consumers.

"This is welcome but until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets."

Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said the measures would have a positive impact on confidence but they would not transform the market.

He said: "They do nothing to tackle the fundamental issue in the market – the lack of availability of wholesale funding which is creating the logjam in the mortgage market.”

Mr Williams called for the early delivery of Sir James Crosby's final report into the mortgage market.

Sir James had said the report was due by the end of summer and it is now believed his findings will be delivered this month.

The Association of Mortgage Intermediaries, called for a "more considered policy response" to the capital markets following the government's proposals.

Chris Cummings, director general of Ami, said: "While we believe more could be done this is a positive and balanced response to the mortgage market's difficulties. The government needed to act and it has done so to help borrowers."

Nicholas Leeming, director of housing portal propertyfinder.com, said the suspension of stamp duty would be of a real benefit to many people but the issue of "the mortgage drought" still needed to be tackled.

He said: "Although some clarity is finally emerging in government policy towards the housing market after months of damaging dithering, we would like to see a greater focus on getting the mortgage markets moving rather than tinkering with the tax system."