It is understood that Labour admit they have overseen a high risk increase in house prices so the Chancellor, Alistair Darling, is to encourage lenders and consumers to use long-term loans to help stabilise the UK market.

Ministers are said to be concerned by the ‘boom and bust' nature of British house prices and the risk this brings to the wider economic picture, leaving many households vulnerable to small fluctuations in interest rates.

It has also been revealed that customers considered to be the most reliable, will be given access to ‘gold standard' loans at much cheaper rates than less affluent, high risk borrowers.