The Government decision to pump £50bn into the banking system to enable the banks to start lending again and restore confidence in the system, as well as the economy is welcome news. I only wish they would have taken this course of action sooner. If they had a lot of pain could have been avoided and a lot of people in the UK housing market would still be in a job.

The unprecedented plan, which is supposedly the brainchild of the Governor of the Bank of England, involves the swapping of government bonds for the mortgages on the books of the banks.

Chancellor Alistair Darling said that it wasn’t a bail out for the banks. Rather it was a loan that had to be repaid. “What it will do” he said is effectively lend banks money to unfreeze the situation we have got at the moment”.

The money markets have been frozen since the American housing crisis impacted the UK market last August. It made banks extremely reluctant to lend to each other let alone would be homeowners and existing borrowers looking to remortgage.

It will certainly help to ease the credit crunch, but my concern is that it’s not enough. I suspect we will see a further injection within six months and the Bank will have to continue to cut interest rates in order to keep the economy and the housing market moving. Potentially this is all good news for homeowners.

However, it will count for nothing if the banks continue to refuse to pass on these cuts. The Government must therefore play hardball with the lenders. They should force them to pass on these cuts in their entirety and to get first time buyers back into the market they should adopt the Tories plan of removing their stamp duty altogether.

What better way for Mr Brown to easily restore some of his lost popularity?